{"url_path":"/sec/bosc/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 Additional Information**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-03-31","source_url":"https://www.sec.gov/Archives/edgar/data/1005516/0001213900-26-037333-index.html","accession_number":"0001213900-26-037333","cik":"0001005516","ticker":"BOSC","issuer_name":"BOS BETTER ONLINE SOLUTIONS LTD","edgar_url":"https://www.sec.gov/Archives/edgar/data/1005516/0001213900-26-037333-index.html","primary_entity_key":"0001005516","primary_entity_name":"BOS BETTER ONLINE SOLUTIONS LTD"},"word_count":10659,"has_tables":true,"body_markdown":"**Item 10:  Additional Information**\n\n \n\n**10A.\nShare Capital**\n\n \n\nNot applicable.\n\n \n\n**10B.\nMemorandum and Articles of Association**\n\n \n\nThe Company’s registration\nnumber at the Israeli Registrar of Companies is 52-0042565.\n\n \n\nIn March 2002, the Company\nadopted new articles of association (“**Articles of Association**”), in view of the Israeli Companies Law. Since then,\ncertain articles of the Articles of Association have been amended. In December 2022, the Articles of Association were amended to increase\nthe Company’s authorized share capital by three million ordinary shares (from 8 million to 11 million) and a corresponding amendment\nwere effected in the Company’s Memorandum of Association (“**Memorandum**”).\n\n \n\nIn December 2024, the Company\nadopted another amendment to the Articles of Association, in accordance with amendments to the Israeli Companies Regulations that increased\ncertain thresholds. In particular, the Board must convene a Special Meeting (as defined therein) if it receives a written requisition\nfrom a shareholder (or shareholders) of the Company holding at least (i) 10% of the issued capital and at least 1% of the voting rights\nin the Company or (ii) 10% of the voting rights in the Company. In addition, a shareholder holding at least 5% of the voting rights in\nthe Company has the right to nominate a board member. For additional information see our proxy statement filed with the SEC under Form\n6-K on October 15, 2024.\n\n \n\nSet forth below is a summary\nof certain provisions of our Memorandum and Articles of Association. This summary is not complete and should be read together with our\nMemorandum and Articles of Association, incorporated by reference hereto.\n\n \n\n40\n\n \n\n \n\n**1.**\n**Objects of the Company:**\n\n \n\nThe Company’s Memorandum\n(Article 2(p)) and Articles of Association (Article 2) provide that the Company may engage in any legal business.\n\n \n\n**2.**\n**Provisions related to the directors of the Company:**\n\n \n\nThe Board of Directors may\nissue shares and other securities, which are convertible or exercisable into shares, up to the limit of the Company’s authorized\nshare capital.\n\n \n\n(a)\nApproval of Certain Transactions under the Israeli Companies Law:\n\n \n\nWe are subject to the provisions\nof the Israeli Companies Law, which became effective on February 1, 2000, as amended. See Item 6C “Board Practices” above.\n\n \n\n(b)\nBorrowing powers exercisable by the Board of Directors are not specifically outlined in the Company’s Articles of Association, however, according to Article 15: “Any power of the Company which has not been vested in another organ pursuant to the Israeli Companies Law or the articles may be exercised by the Board of Directors”.\n\n \n\n(c)\nThe Company’s Articles of Association do not contain provisions regarding the retirement of directors under an age limit requirement, nor do they contain a provision requiring a director to hold any Company shares in order to qualify as a Director.\n\n \n\n**3.**\n**With regard to the rights, preferences and restrictions attaching to the Ordinary Shares, the Company’s Articles of Association provide the following:**\n\n \n\n(a)\nDividends, Rights to Share in the Company’s Profits and Rights to Share in any Surplus upon Liquidation\n\n \n\nAll holders of paid-up Ordinary\nShares of the Company have an equal right to participate in the distribution of (i) dividends, whether by cash or by bonus shares; (ii)\nCompany assets; and (iii) the Company’s surplus assets upon winding up, all pro rata to the number of shares held by them.\n\n \n\nThe Board of Directors is\nthe organ authorized to decide upon the distribution of dividends and bonus shares (Article 26.1). The shareholders who are entitled to\na dividend are the current shareholders as of the date of the resolution for the dividend or on a later date if another date is specified\nin the resolution on the dividend’s distribution. If the Board of Directors does not otherwise determine, any dividend may be paid\nby way of a cheque or payment order that shall be sent by mail to the registered address of the shareholder or person entitled thereto,\nor in the case of registered joint shareholders to the shareholder whose name appears first in the shareholders’ register in relation\nto the joint shareholding. Every such cheque shall be drawn up to the order of the person to whom it is being sent. The receipt of a person\nwho on the date of the dividend’s declaration is listed in the shareholders’ register as the holder of any share or, in the\ncase of joint shareholders, of one of the joint shareholders shall serve as confirmation of all the payments made in connection with such\nshare. For the purpose of implementing any resolution pursuant to the provisions of this paragraph, the Board of Directors may settle,\nas it deems fit, any difficulty arising in relation to the distribution of the dividend and/or bonus shares, including determine the value\nfor the purpose of the said distribution of certain assets and resolve that payments in cash shall be made to members in reliance upon\nthe value thus determined, determine regulations in relation to fractions of shares or in relation to non-payment of amounts less than\nNIS 200.\n\n \n\n41\n\n \n\n \n\n(b)\nVoting Rights\n\n \n\nAll holders of paid-up Ordinary\nShares of the Company have an equal right to participate in and vote at the Company’s general meetings, whether ordinary or special,\nand each of the shares in the Company shall entitle its holder, present at the meeting and participating in the vote, himself, by proxy\nor through a voting instrument, to one vote (Article 4.2.1). Such voting rights may be affected in the future by the grant of any special\nvoting rights to the holders of a class of shares with preferential rights. Shareholders may vote either in person or through a proxy\nor voting instrument, unless the Board of Directors prohibits voting through a voting instrument on a certain matter and stated so in\nthe notice of the meeting (Articles 14.1 and 14.6). A resolution at the general meeting shall be passed by an ordinary majority unless\nanother majority is specified in the Israeli Companies Law or the Company’s Articles of Association (Article 14.3). For applicable\nprovisions of the Israel Companies Law, see Item 6C “Board Practices”.\n\n \n\n(c)\nElection of Directors\n\n \n\nThe Company’s directors\nare elected by the shareholders only at a shareholders’ annual meeting. The Ordinary Shares do not have cumulative voting rights\nwith respect to the election of directors. The holders of Ordinary Shares, conferring more than 50% of the voting power present by person\nor by proxy at the shareholders’ meeting, have the power to elect the directors.\n\n \n\nThe Company’s Board\nis classified into three separate classes, as nearly equal in number as possible, with one class being elected each year to serve a three-year\nterm (Article 16.3). Directors can only be removed at an annual shareholders’ meeting by a vote 60% of the shareholders actually\nvoting at the shareholders’ meeting (Article 16.7), or otherwise if they cease to hold office pursuant to the provisions of the\nCompany’s Articles of Association. In addition, the Board of Directors, may by a unanimous vote appoint a director (to fill a vacancy\nor otherwise) between annual shareholders’ meetings, and such appointment shall be valid until the next annual meeting or until\nsuch appointee ceases to hold office pursuant to the provisions of the Company’s Articles of Association (Article 16.3). Any amendments\nto the Articles of Association with respect to the Board composition shall require the approval of 60% of the shareholders actually voting\nat the shareholders meeting.\n\n \n\n(d)\nRedemption\n\n \n\nThe Company may, subject to\nany applicable law, issue redeemable securities on such terms as determined by the Board of Directors, provided that the general meeting\nof shareholders approves the Board of Director’s recommendation and the terms determined (Article 27).\n\n \n\n(e)\nCapital Calls by the Company\n\n \n\nThe Board of Directors may\nonly make calls for payment upon shareholders in respect of monies not yet paid for shares held by them (Article 7.2).\n\n \n\n(f)\nDiscrimination\n\n \n\nNo provision in the Company’s\nArticles of Association discriminates against an existing or prospective holder of securities, as a result of such shareholder owning\na substantial amount of shares.\n\n \n\n**4.**\n**Modification of Rights of Holders of Stock:**\n\n \n\nThe general meeting of shareholders\nmay resolve to create new shares of an existing class or of a new class with special rights and/or restrictions (Article 9.1).\n\n \n\nSo long as not otherwise provided\nin the shares’ issue terms and subject to the provisions of any law, the rights attached to a particular class of shares may be\naltered, after a resolution is passed by the Company and with the approval of a resolution passed at a general meeting of the holders\nof the shares of such class or the written agreement of all the class holders. The provisions of the Company’s Articles of Association\nregarding general meetings shall apply, mutatis mutandis, to a general meeting of the holders of a particular class of shares (Article\n10.1). The rights vested in the holders of shares of a particular class that were issued with special rights shall not be deemed to have\nbeen altered by the creation or issue of further shares ranking equally with them, unless otherwise provided in such shares’ issue\nterms (Article 10.2).\n\n \n\nThe above-mentioned conditions\nare not more onerous than is required by law. \n\n \n\n42\n\n \n\n \n\n**5.**\n**Annual General Meetings and Extraordinary General Meetings:**\n\n \n\nAn Annual Meeting shall be\nconvened at least once a year at such place and time as determined by the Board of Directors but no later than 15 months from the last\nAnnual Meeting. The Company’s other meetings shall be referred to as “Special Meetings” (Article 12.1). The Annual Meeting’s\nagenda shall include a discussion of the Board of Directors’ reports and the financial statements as required by the Companies Law.\nThe Annual Meeting shall appoint an auditor, appoint the directors (according to the recent amendment in the our Articles of Association,\ndirectors may only be appointed at the Annual Meeting) and discuss all the other matters which must be discussed at the Company’s\nAnnual Meeting, pursuant to Company’s Articles or the Companies Law, as well as any other matter determined by the Board of Directors\n(Article 12.2).\n\n \n\nThe Board of Directors may\nconvene a Special Meeting pursuant to its resolution and it must convene a Special Meeting if it receives a written requisition from any\none of the following (i) two directors or one quarter of the directors holding office; and/or (ii) one or more shareholders holding the\nrequired percentage under the Companies Law (Article 12.3). A requisition must detail the objects for which the Special Meeting must be\nconvened and shall be signed by the persons requisitioning it and sent to the Company’s registered office. The requisition may be\nmade up of a number of documents in an identical form of wording, each of which shall be signed by one or more of the persons requisitioning\nthe Special Meeting (Article 12.4). When the Board of Directors is required to convene a Special Meeting, it shall do so within 21 days\nof the Requisition being submitted to it, for a date that shall be specified in the invitation and subject to the law (Article 12.5).\n\n \n\nOne or more shareholders,\nholding the required percentage under the Companies Law are entitled to request the Board of Directors to include a certain matter in\nthe agenda of an upcoming general meeting, provided that such matter is appropriate for discussion at general meetings.\n\n \n\nNotice to the Company’s\nshareholders regarding the convening of an Annual Meeting or a Special Meeting shall be sent to all the shareholders listed in the Company’s\nshareholders’ register at least 21 days prior to the general meeting and shall be published in other ways insofar as required by\nthe Companies Law. The notice shall include the agenda, proposed resolutions and arrangements with regard to a written vote. The accidental\nomission to give notice of a meeting to any member, or the non-receipt of notice sent to such member, shall not invalidate the proceedings\nat such meeting (Article 12.6).\n\n \n\nThe shareholders entitled\nto participate in and vote at the general meeting are the shareholders on the date specified by the Board of Directors in the resolution\nto convene the meeting, and subject to the law (Article 14.1).\n\n \n\nNo discussions may be commenced\nat the general meeting unless a quorum is present at the time of the discussion’s commencement. A quorum is the presence of at least\ntwo shareholders holding at least 33⅓% of the voting rights (including presence through a proxy or a voting instrument), within\nhalf an hour of the time fixed for the meeting’s commencement (Article 13.1). If no quorum is present at a general meeting within\nhalf an hour of the time fixed for the commencement thereof, the meeting shall be adjourned for one week, to the same day, time and place,\nor to a later time if stated in the invitation to the meeting or in the notice of the meeting (Article 13.2). The quorum for the commencement\nof the adjourned meeting shall be any number of participants. \n\n \n\n**6.**\n**Limitations on the rights to own securities:**\n\n \n\nThere are no limitations on\nthe rights to own the Company’s securities, including the rights of non-residents or foreign shareholders to do so.\n\n \n\n43\n\n \n\n \n\n**7.**\n**Change of Control:**\n\n \n\nUnder the Israeli Companies\nLaw, a merger is generally required to be approved by the shareholders and Board of Directors of each of the merging companies. Shareholder\napproval is not required if the company that will not survive is controlled by the surviving company. Additionally, the law provides some\nexceptions to the shareholder approval requirement in the surviving company. If the share capital of the company that will not be the\nsurviving company is divided into different classes of shares, the separate approval of each class is also required, unless determined\notherwise by the court. A majority of votes approving the merger shall suffice, unless the company (like ours) was incorporated in Israel\nprior to the enactment of Israeli Companies Law, in which case a majority of 75% of the voting power is needed in order to approve the\nmerger. Additionally, unless the court determines otherwise, a merger will not be approved if it is objected to by a majority of the shareholders\npresent at the meeting, after excluding the shares held by the other party to the merger, by any person who holds 25% or more of the other\nparty to the merger and by the relatives of and corporations controlled by these persons. Upon the request of a creditor of either party\nto the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result\nof the merger, the surviving company will be unable to satisfy the obligations of any of the parties of the merger. Also, a merger can\nbe completed only after all approvals have been submitted to the Israeli Registrar of Companies and provided that 30 days have elapsed\nsince shareholder approval was received and 50 days have elapsed from the time that a proposal for approval of the merger was filed with\nthe Registrar by each merging company.\n\n \n\nThe Israeli Companies Law\nalso provides that an acquisition of shares in a public company must be made by means of a tender offer if, as a result of the acquisition,\nthe purchaser would become a holder of 25% or more of the voting power at general meetings. This rule does not apply if there is already\nanother holder of 25% or more of the voting power at general meetings. Similarly, the Israeli Companies Law provides that an acquisition\nof shares in a public company must be made by means of a tender offer if, as a result of the acquisition, the purchaser would become a\nholder of more than 45% of the voting power of the company. This rule does not apply if someone else already holds 45% of the voting power\nof the company. An acquisition from a 25% or 45% holder, which turns the purchaser into a 25% or 45% holder respectively, does not require\na tender offer. An exception to the tender offer requirement may also apply when the additional voting power is obtained by means of a\nprivate placement approved by the general meeting of shareholders.\n\n \n\nUnder the Israeli Companies\nLaw, a person may not acquire shares in a public company if, after the acquisition, he will hold more than 90% of the shares or more than\n90% of any class of shares of that company, unless a tender offer is made to purchase all of the shares or all of the shares of the particular\nclass. The Israeli Companies Law also provides that as long as a shareholder in a public company holds more than 90% of the company’s\nshares or of a class of shares, that shareholder shall be precluded from purchasing any additional shares. If such tender offer is accepted\nand less than 5% of the shares of the company are not tendered, and a majority of the offeree shareholders not having a personal interest\naccepted the offer, all of the shares will transfer to the ownership of the acquirer. Similarly, all of the shares will transfer to the\nownership of the acquirer in the event that less than 2% of the shares of the company are not tendered. The Companies Law provides for\nappraisal rights if any shareholder files a request in court within six months following the consummation of a full tender offer. However,\nthe acquirer may stipulate in the tender offer that any shareholder tendering his shares will not be entitled to appraisal rights. If\nownership in all of the shares is not transferred to the acquirer as described above, then the acquirer may not acquire shares in the\ntender offer that will cause his shareholding to exceed 90% of the outstanding shares.\n\n \n\nThe classified board structure\nadopted by the shareholder in October 2019 may increase the amount of time required for a takeover bidder to obtain control of the Company\nwithout the cooperation of the Board, even if the takeover bidder were to acquire a majority of the voting power of the Company’s\noutstanding Ordinary Shares. Without the ability to obtain immediate control of the Board, a takeover bidder will not be able to take\naction to remove other impediments to its acquisition of the Company. Thus, the Company’s board structure could discourage certain\ntakeover attempts, perhaps including some takeovers that shareholders may feel would be in their best interests.\n\n \n\n**8.**\n**Disclosing Share Ownership:**\n\n \n\nThe Company’s constituting\ndocuments have no provisions governing the ownership threshold, above which shareholder ownership must be disclosed.\n\n \n\n44\n\n \n\n \n\n**10C.\nMaterial Contracts**\n\n \n\nAll material contracts have\nbeen described in detail throughout this form, wherever applicable.\n\n \n\n**10D.\nExchange Controls**\n\n \n\nThere are currently no Israeli\ncurrency control restrictions on payments of dividends or other distributions with respect to our Ordinary Shares or the proceeds from\nthe sale of the shares, except for the obligation of Israeli residents to file reports with the Bank of Israel regarding certain transactions.\nHowever, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.\n\n \n\n**10E.\nTaxation**\n\n \n\nThe following is a summary\nof the material Israeli tax consequences, Israeli foreign exchange regulations and certain Israeli government programs affecting the Company.\n\n \n\nTo the extent that the discussion\nis based on tax or other legislation that has not been subject to judicial or administrative interpretation, there can be no assurance\nthat the views expressed in the discussion will be accepted by the judiciary tax or other authorities in question.\n\n \n\nEACH INDIVIDUAL OR CORPORATION\nIS URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND OTHER DISPOSITION\nOF OUR ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES. \n\n \n\nThe following is a general\ndiscussion only and is not exhaustive of all possible tax considerations. It is not intended, and should not be construed, as legal or\nprofessional tax advice and should not be relied upon for tax planning purposes. In addition, this discussion does not address all of\nthe tax consequences that may be relevant to holders or purchasers of our ordinary shares in light of their particular investment circumstances,\nor certain types of holders or purchasers of our ordinary shares subject to special tax treatment, such as of this kind of investor traders\nin securities and persons that own, directly or indirectly, 10% or more of our outstanding voting capital, who are subject to special\ntax regimes not covered in this discussion.\n\n \n\n**Israeli Tax Considerations**\n\n** **\n\nThe following summary describes\nthe current tax structure applicable to companies in Israel, with special reference to its effect on us. The following also contains a\ndiscussion of the material Israeli tax consequences to holders of our ordinary shares.\n\n \n\n**Special Provisions Relating to Tax Reporting\nin United States Dollars**\n\n \n\nThe Company and its subsidiaries,\nrespectively, have elected to measure their taxable income and file their Israeli tax return in United States Dollars, under the Israeli\nIncome Tax Regulations (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships\nand the Determination of Their Taxable Income), 5746-1986.** **\n\n \n\n**General Corporate Tax Structure in Israel**\n\n \n\nIsraeli companies are generally\nsubject to corporate tax on their taxable income at a flat rate. Effective January 2018 and thereafter, the Israeli corporate tax rate\nis 23%. Under the Tax Ordinance, a company will be considered as an “Israeli resident” if: (a) it was incorporated in Israel;\nor (b) the control and management of its business are operated from Israel.\n\n \n\n45\n\n \n\n \n\n**Capital Gains Tax on Sales of Our Ordinary Shares**\n\n \n\nIsraeli law generally imposes\na capital gains tax on the sale of any capital assets by Israeli residents, as defined for Israeli tax purposes, and on the sale of capital\nassets by non-residents of Israel if those assets (i) are located in Israel, (ii) are shares or a right to shares in an Israeli resident\ncorporation, or (iii) represent, directly or indirectly, rights to asset located in Israel, unless a specific exemption is available or\nan applicable tax treaty between Israel and the shareholder’s country of residence provides otherwise. The Tax Ordinance distinguishes\nbetween “Real Capital Gain” and “Inflationary Surplus”. The Inflationary Surplus is a portion of the total capital\ngain equivalent to the increase of the relevant asset’s purchase price attributable to the increase in the Israeli consumer price\nindex or, in certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of sale. Real Capital\nGain is the excess of the total capital gain over the Inflationary Surplus. Inflationary Surplus is currently not subject to tax in Israel.\n\n \n\n*Taxation of Israeli Residents\nShareholders*\n\n \n\nGenerally, the tax rate applicable\nto capital gains derived from the sale of shares, whether listed on a stock market or not, is 25% for Israeli individuals, unless such\nshareholder claims a deduction for financing expenses in connection with such shares, in which case the gain is generally taxed at a rate\nof 30%. Additionally, if such individual shareholder is considered a “substantial shareholder” at the time of sale or at any\ntime during the 12-month period preceding such sale, such gain will be taxed at the rate of 30%. A “substantial shareholder”\nis generally a person who alone or together with such person’s relative or another person who collaborates with such person on a\npermanent basis, holds, directly or indirectly, at least 10% of any “means of control” in the company. “Means of control”\ngenerally include the right to vote, receive profits, receive assets upon liquidation, nominate a director or an executive officer, or\norder someone who holds any of the aforesaid rights how to act, regardless of the source of such right. Real Capital Gain derived by an\nIsraeli resident corporation is generally subject to the corporate tax rate (currently 23%). Notwithstanding the foregoing, dealers in\nsecurities in Israel whose gains from selling or otherwise disposing of the shares are deemed to be business income are taxed at regular\ntax rates applicable to business income (a corporate tax rate for a company and a marginal tax rate of up to 47% for an individual in\n2025 and 2026, excluding Surtax, as discussed below) unless contrary provisions in a relevant tax treaty apply.\n\n* *\n\n*Taxation of Non-Israeli\nResidents Shareholders* \n\n \n\nNon-Israeli residents, both\ncompanies and individuals, are generally exempt from Israeli capital gains tax on any gains derived from the sale of shares of Israeli\ncompanies publicly traded on a recognized stock exchange or regulated market outside of Israel, provided, among other conditions, that\nsuch capital gains are not attributable to a permanent establishment of the shareholder maintained in Israel, and the shares are not traded\non the Tel Aviv Stock Exchange on the date of their sale. However, a non-Israeli “Body of Persons” (as defined under the Tax\nOrdinance), which includes corporate entities, partnerships and other entities, will not be entitled to such exemption if Israeli residents\n(i) have, alone or together with such person’s relatives or another person who, according to an agreement, collaborates with such\nperson on a permanent basis regarding material affairs of the company, or with another Israeli tax resident, a controlling interest of\nmore than 25% in any of the means of control of such non-Israeli Body of Persons, or (ii) are the beneficiaries or are entitled to 25%\nor more of the revenues or profits of such non-Israeli corporation, in each case, whether directly or indirectly.\n\n \n\n46\n\n \n\n \n\nAdditionally, a sale of securities\nin an Israeli resident company by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable\ntax treaty. For example, pursuant to the treaty between the government of the United States and the government of Israel with respect\nto taxes on income, as amended (the “U.S.” and the “U.S.-Israel Tax Treaty”, respectively), the sale, exchange\nor other disposition of ordinary shares by a person who (i) holds the ordinary shares as a capital asset, (ii) qualifies as a resident\nof the United States within the meaning of the U.S.-Israel Tax Treaty, and (iii) is entitled to claim the benefits afforded to such person\nby the U.S.-Israel Tax Treaty, generally, will not be subject to the Israeli capital gains tax. Such exemption will not apply if (i) such\nU.S. resident holds, directly or indirectly, shares representing 10% or more of our voting power during any part of the 12-month period\npreceding such sale, exchange or other disposition, subject to certain conditions, (ii) the capital gains arising from such sale, exchange\nor other disposition can be attributed to a permanent establishment in Israel, (iii) the capital gains arising from such sale, exchange\nor other disposition is attributed to real estate located in Israel; (iv) the capital gains arising from such sale, exchange or other\ndisposition is attributed to royalties, or (v) such Treaty U.S. Resident is an individual and was present in Israel for 183 days or more\nduring the relevant taxable year. In any such case, the sale, exchange or other disposition of ordinary shares would be subject to Israeli\ntax, to the extent applicable; however, under the U.S.-Israel Tax Treaty, such U.S. resident would be permitted to claim a credit for\nsuch taxes against the U.S. federal income tax imposed with respect to such sale, exchange or other disposition, subject to the limitations\nin U.S. laws applicable to foreign tax credits. The U.S.-Israel Tax Treaty does not relate to any specific U.S. state or local taxes.\n\n \n\nRegardless of whether shareholders\nmay be liable for Israeli income tax on the sale of our ordinary shares, the payment of the consideration may be subject to the withholding\nof Israeli tax at the source. Therefore, shareholders may be required to demonstrate that they are exempt from tax on their capital gains\nin order to avoid withholding at the time of sale by providing a valid certificate from the Israel Tax Authority allowing for an exemption\nfrom withholding tax at source at the time of sale. Specifically, in transactions involving a sale of all of the shares of an Israeli\nresident company, in the form of a merger or otherwise, the Israel Tax Authority may require shareholders who are not liable for Israeli\ntax to sign certain declarations or obtain a specific exemption from the Israel Tax Authority to confirm their status as a non-Israeli\nresident for tax purposes, and, in the absence of such declarations or exemptions, may require the purchaser of the shares to withhold\nIsraeli taxes at source.\n\n \n\nA detailed return, including\na computation of the tax due, must be filed and an advanced payment must be paid on January 31 and July 31 of every tax year in respect\nof sales of securities traded on a stock exchange made within the previous six months. However, if all tax due was withheld at source\naccording to applicable provisions of the Tax Ordinance and regulations promulgated thereunder the aforementioned return need not be filed\nprovided that, among other conditions (i) such income was not generated from business conducted in Israel by the taxpayer, (ii) the taxpayer\nhas no other taxable sources of income in Israel with respect to which a tax return is required to be filed and an advance payment does\nnot need to be made, and (iii) the taxpayer is not obligated to pay Surtax (as further explained below). Capital gain is also reportable\non the annual income tax return.\n\n \n\n**Taxation of Dividends Paid on our Ordinary\nShares**\n\n \n\nThe following discussion refers\nto dividends paid on our ordinary shares. We cannot assure you that, in the event we declare a dividend, we will designate the profits\nthat we distribute in a way that will reduce shareholders’ tax liability.\n\n \n\n*Taxation of Israeli Residents Shareholders\non Receipt of Dividends*\n\n \n\nIsraeli resident individuals\nare generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares. The tax rate generally applicable\nto such dividends is 25%, or 30% for an individual shareholder that is considered a substantial shareholder (described above) at the time\nof distribution or at any time during the 12-month period preceding such distribution. Such dividends are generally subject to Israeli\nwithholding tax at a rate of 25% (whether the recipient is a substantial shareholder or not) if the shares are registered with a nominee\ncompany. Israeli resident companies are generally exempt from income tax from dividends sourced from income produced or accrued in Israel,\nreceived directly or indirectly from another company that is subject to Israeli corporate tax.\n\n \n\n47\n\n \n\n \n\n*Taxation of Non-Israeli Residents Shareholders\non Receipt of Dividends*\n\n \n\nNon-Israeli residents, both\ncompanies and individuals, are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares, at the\nrate of 25%, or 30% for a shareholder that is considered a substantial shareholder (described above) at the time of distribution or at\nany time during the 12-month period preceding such distribution. Such dividends are generally subject to Israeli withholding tax at a\nrate of 25% if the shares are registered with a nominee company (whether or not the recipient is a substantial shareholder). The tax will\nbe withheld at source, unless a reduced rate is provided in a treaty between Israel and the shareholder’s country of residence (subject\nto the receipt in advance of a valid tax certificate from the Israel Tax Authority allowing for a reduced tax rate).\n\n \n\nUnder the U.S.-Israel Tax\nTreaty, the following withholding rates will apply with respect to dividends distributed by an Israeli resident company to a U.S. resident\nentitled to claim the benefits of the U.S.-Israel Tax Treaty (if a certificate for a reduced withholding tax rate would be provided in\nadvance from the Israel Tax Authority and): (i) if the U.S. resident is a corporation which holds during that portion of the taxable year\nwhich precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10% of the outstanding\nvoting shares of the Israeli resident paying corporation and not more than 25% of the gross income of the Israeli resident paying corporation\nfor such prior taxable year (if any) consists of certain type of interest or dividends — the withholding tax rate is 12.5%, (ii)\nif both the conditions mentioned in (i) above are met and the dividend is paid from an Israeli resident company’s income which was\nentitled to a reduced tax rate applicable to an Approved Enterprise (as defined by the Law for the Encouragement of Capital Investments,\n1959) — the withholding tax rate is 15% and (iii) in all other cases, the withholding tax rate is 25%. The aforementioned rates\nunder the U.S.-Israel Tax Treaty would not apply if the dividend income is derived through a permanent establishment that the U.S. Resident\nhas in Israel.\n\n \n\nA non-Israeli resident who\nreceives a dividend derived from or accrued in Israel, from which tax was fully withheld at source, is generally exempt from the duty\nto file tax returns in Israel with respect to such income, provided that : (i) such income was not derived from a business conducted in\nIsrael by the taxpayer; (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required\nto be filed; and (iii) the taxpayer is not obligated to pay Surtax (as further explained below). \n\n** **\n\n**Surtax**\n\n \n\nSubject to the provisions\nof an applicable tax treaty, individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli\nresident) are subject to (i) an additional tax at a rate of 3% on annual income (including, but not limited to, income derived from dividends,\ninterest and capital gains) exceeding a certain threshold, or the Threshold Amount (NIS 721,560 for years 2024 through 2027, which amount\nwill be updated annually starting January 1, 2028, based on the change in the Israeli consumer price index); and (ii) an additional tax\nat a rate of 2% on annual capital-sourced income (defined as income from any source other than employment income, business income, or\nincome from “personal effort,” and which includes, among other things, income from capital gains, dividends, interest, rental\nincome, or from the sale of real property) exceeding the Threshold Amount.\n\n** **\n\n**Estate and Gift Tax**\n\n \n\nIsraeli law presently does not impose estate or\ngift taxes.\n\n \n\n48\n\n \n\n \n\n**Certain Material United States Federal Income\nTax Considerations**\n\n** **\n\nSubject to the limitations\ndescribed herein, this discussion summarizes certain material U.S. federal income tax consequences of the purchase, ownership and disposition\nof our Ordinary Shares to a U.S. holder (as defined below) that holds our Ordinary Shares as “capital assets” within the meaning\nof Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally property held for investment).\nA U.S. holder is a beneficial owner of our Ordinary Shares who is:\n\n \n\n \n●\nan individual who is a citizen or resident of the United States for U.S. federal income tax purposes, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under U.S. federal income tax laws;\n\n \n\n \n●\na corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States or any political subdivision thereof or the District of Columbia;\n\n \n\n \n●\nan estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or\n\n \n\n \n●\na trust: (i) if a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions; or (ii) that has in effect a valid election under applicable U.S. Treasury Regulations to be treated as a U.S. person.\n\n \n\nA non-U.S. holder is a beneficial\nowner of our Ordinary Shares that is not a U.S. holder. Unless otherwise specifically indicated, this discussion does not consider the\nU.S. federal income tax consequences to a person that is a non-U.S. holder of our Ordinary Shares and considers only U.S. holders that\nwill own the Ordinary Shares as capital assets (generally for investment).\n\n \n\nIf a partnership (or any other\nentity treated as a partnership for U.S. federal income tax purposes) holds our Ordinary Shares, the tax treatment of the partnership\nand a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner\nor partnership should consult its tax advisor as to its tax consequences.\n\n \n\nThe discussion in this summary\nis based on current provisions of the Code, current and proposed Treasury Regulations promulgated under the Code and administrative and\njudicial interpretations of the Code, all as currently in effect and all of which are subject to differing interpretations or to change,\npossibly with retroactive effect so as to result in U.S. federal income tax consequences different from those discussed below. This discussion\ndoes not address all aspects of U.S. federal income taxation that may be relevant to any particular U.S. holder based on the U.S. holder’s\nparticular circumstances (including the potential application of the alternative minimum tax). In particular, this discussion does not\naddress the U.S. federal income tax consequences to U.S. holders who are a bank, broker-dealers or who own, directly, indirectly or constructively,\n10% or more, by voting power or value, of our Ordinary Shares, real estate investment trusts, regulated investment companies, grantor\ntrusts, S corporations, U.S. holders holding the Ordinary Shares as part of a hedging, straddle or conversion transaction, U.S. holders\nwhose functional currency is not the U.S. dollar, U.S. holders who have elected mark-to-market accounting, insurance companies, tax-exempt\norganizations, financial institutions, persons that receive Ordinary Shares as compensation for the performance of services, certain former\ncitizens or former long-term residents of the United States and persons subject to the alternative minimum tax, who may be subject to\nspecial rules not discussed below. Additionally, this discussion does not address the possible application of U.S. federal estate or gift\ntaxes or any aspect of state, local or non-U.S. tax laws.\n\n \n\n49\n\n \n\n \n\n**This summary of certain\nmaterial U.S. federal income tax considerations is for general information only and is not intended to be, and should not be considered\nto be, legal or tax advice or relied upon for tax planning purposes. Accordingly, each U.S. holder of our Ordinary Shares is advised to\nconsult with its own tax advisor with respect to the specific U.S. federal, state, local and foreign income tax consequences to which\nit is subject with respect to purchasing, holding or disposing of our Ordinary Shares and the effect of possible changes in applicable\ntax laws.**\n\n \n\n**U.S. Holders of Ordinary Shares**\n\n \n\n**Taxation of distributions on Ordinary Shares**\n\n \n\nWe have never paid cash dividends\non our Ordinary Shares and we may not distribute cash or other dividends on our Ordinary Shares in the foreseeable future. Subject the\ndiscussion below under “Tax consequences if we are a passive foreign investment company (a “**PFIC**”),” a\ndistribution paid by us with respect to our Ordinary Shares, including the amount of any non-U.S. taxes withheld, to a U.S. holder will\nbe treated as dividend income to the extent that the distribution does not exceed our current and accumulated earnings and profits, as\ndetermined for U.S. federal income tax purposes. Dividends that are received with respect to Ordinary Shares by U.S. holders that are\nindividuals, estates or trusts generally will be taxed at preferential tax rates (currently a maximum rate of 20%), provided that such\ndividends meet the requirements of “qualified dividend income” and we are not a PFIC in the year in which the dividend is\npaid (or the prior taxable year). For this purpose, qualified dividend income generally includes dividends paid by a non-U.S. corporation\nif certain holding period and other requirements are met and either (i) the stock of the non-U.S. corporation with respect to which the\ndividends are paid is “readily tradable” on an established securities market in the U.S. (e.g., the Nasdaq Global Market);\nor (ii) the non-U.S. corporation is eligible for benefits of a comprehensive income tax treaty with the U.S. which includes an information\nexchange program and is determined to be satisfactory by the U.S. Secretary of the Treasury. The United States Internal Revenue Service\n(“IRS”) has determined that the U.S.-Israel income tax treaty is satisfactory for this purpose and includes an exchange information\nprogram. Dividends that fail to meet such requirements, and dividends received by corporate U.S. holders, are taxed at ordinary income\nrates. No dividend received by a U.S. holder will be a qualified dividend (i) if the U.S. holder held the ordinary share with respect\nto which the dividend was paid for less than 61 days during the 121-day period beginning on the date that is 60 days before the ex-dividend\ndate with respect to such dividend, excluding for this purpose, under the rules of Section 246(c) of the Code, any period during which\nthe U.S. holder has an option to sell, is under a contractual obligation to sell, has made and not closed a short sale of, is the grantor\nof a deep-in-the-money or otherwise nonqualified option to buy, or has otherwise diminished its risk of loss by holding other positions\nwith respect to, such ordinary share (or substantially identical securities); or (ii) to the extent that the U.S. holder is under an obligation\n(pursuant to a short sale or otherwise) to make related payments with respect to positions in property substantially similar or related\nto the ordinary share with respect to which the dividend is paid. If we were to be considered a “passive foreign investment company”\nor PFIC (as such term is defined in the Code) for any taxable year, dividends paid on our Ordinary Shares in such year or in the following\ntaxable year would not be qualified dividends. See discussion below regarding our PFIC status at “Tax Consequences If We Are A Passive\nForeign Investment Company.” In addition, a non-corporate U.S. holder will be able to take a qualified dividend into account in\ndetermining its deductible investment interest (which is generally limited to its net investment income) only if it elects to do so. In\nsuch case the dividend will be taxed at ordinary income rates.\n\n \n\nThe amount of any distribution\nwhich exceeds the amount treated as a dividend will be treated first as a non-taxable return of capital, reducing (but not below zero)\nthe U.S. holder’s tax basis in its Ordinary Shares to the extent thereof, and then as capital gain from the deemed disposition of\nthe Ordinary Shares (subject to the PFIC rules discussed below). Such distributions (treated as capital gain) would not give rise to income\nfrom sources outside the United States. Corporate holders will not be allowed a deduction for dividends received in respect of the Ordinary\nShares.\n\n \n\nThere is no assurance that\ndividends received by a U.S. holder from the Company will be eligible for the preferential tax rates mentioned above. Dividends that are\nnot eligible for the preferential tax rates will be taxed at ordinary income rates. U.S. holders should consult their own tax advisors\nregarding the availability of the preferential tax rate for dividends paid with respect to our Ordinary Shares.\n\n \n\n50\n\n \n\n \n\nDividends paid by us in NIS\nwill be included in the gross income of U.S. holders at the U.S. dollar amount of the dividend (including any non-U.S. taxes withheld\ntherefrom), based upon the exchange rate in effect on the date the distribution is included in income, regardless of whether the NIS is\nconverted into U.S. dollars. If the NIS is not converted into U.S. dollars on the date of receipt, U.S. holders will have a tax basis\nin the NIS for U.S. federal income tax purposes equal to that dollar value. Any subsequent gain or loss in respect of the NIS arising\nfrom exchange rate fluctuations on a subsequent conversion or any other disposition of the NIS will be treated as ordinary income or loss,\nand generally will be income or loss from sources within the United States for U.S. foreign tax credit purposes. \n\n \n\nDividends received with respect\nto our Ordinary Shares will constitute “portfolio income” for purposes of the limitation on the deductibility of passive activity\nlosses and, therefore, generally may not be offset by passive activity losses. Dividends received with respect to our Ordinary Shares\nalso generally will be treated as “investment income” for purposes of the investment interest deduction limitation contained\nin Section 163(d) of the Code, and generally as foreign-source passive income for U.S. foreign tax credit purposes. Subject to certain\nlimitations, U.S. holders may elect to claim as a foreign tax credit against their U.S. federal income tax liability for any Israeli income\ntax withheld from distributions with respect to our Ordinary Shares which constitute dividends under U.S. income tax law. A U.S. holder\nthat does not elect to claim a foreign tax credit may instead claim a deduction for Israeli income tax withheld, but only if the U.S.\nholder elects to do so with respect to all foreign income taxes in such year. If a refund of the tax withheld is available under the applicable\nlaws of Israel or under the Israel-U.S. income tax treaty, the amount of tax withheld that is refundable will not be eligible for such\ncredit against your U.S. federal income tax liability (and will not be eligible for the deduction against your U.S. federal taxable income).\nIn addition, special rules may apply to the computation of foreign tax credits relating to “qualified dividend income,” as\ndefined above. The calculation of foreign tax credits and, in the case of a U.S. holder that elects to deduct foreign income taxes, the\navailability of deductions involve the application of complex rules that depend on a U.S. holder’s particular circumstances. U.S.\nholders are urged to consult their own tax advisors regarding the availability to them of foreign tax credits or deductions in respect\nof any Israeli tax withheld or paid with respect to any dividends which may be paid with respect to our Ordinary Shares, including limitations\npursuant to the U.S.-Israel income tax treaty.\n\n \n\n**Taxation of the disposition of Ordinary Shares**\n\n \n\nSubject to the discussion\nbelow under “Tax consequences if we are a passive foreign investment company,” upon the sale, exchange, redemption or other\ndisposition of our Ordinary Shares (other than in certain non-recognition transactions), a U.S. holder will recognize capital gain or\nloss in an amount equal to the difference between the amount realized on the disposition (including the amount of any foreign taxes withheld\ntherefrom) and the U.S. holder’s tax basis in the Ordinary Shares; which is usually the cost to the U.S. holder of the Ordinary\nShares. The gain or loss recognized on the disposition of the Ordinary Shares will be considered a long-term capital gain or loss if the\nU.S. holder had held the Ordinary Shares for more than one year at the time of the disposition and otherwise will generally be short-term\ncapital gain or loss. The deductibility of capital losses is subject to limitations. Long-term capital gains of certain non-corporate\nshareholders are generally taxed at preferential rates (currently a maximum of 20%). Gain or loss recognized by a U.S. holder on a sale,\nexchange or other disposition of Ordinary Shares generally will be treated as U.S. source income or loss for U.S. foreign tax credit limitation\npurposes.\n\n \n\n51\n\n \n\n \n\nA U.S. holder that uses the\ncash method of accounting calculates the U.S. dollar value of the proceeds received on the sale as of the date that the sale settles.\nHowever, a U.S. holder that uses the accrual method of accounting is required to calculate the value of the proceeds of the sale as of\nthe trade date and may therefore realize foreign currency gain or loss. An accrual method U.S. holder may avoid realizing a foreign currency\ngain or loss by electing to use the settlement date to determine the proceeds of sale for purposes of calculating the foreign currency\ngain or loss. In addition, a U.S. holder that receives foreign currency upon disposition of Ordinary Shares and converts the foreign currency\ninto U.S. dollars after the settlement date or trade date (whichever date the U.S. holder is required to use to calculate the value of\nthe proceeds of sale) may have foreign exchange gain or loss based on any appreciation or depreciation in the value of the foreign currency\nagainst the U.S. dollar, which will generally be U.S. source ordinary income of loss. U.S. holders are urged to consult their own tax\nadvisors regarding the foreign tax credit rules with respect to any foreign taxes withheld from a taxable disposition of our Ordinary\nShares, as well as regarding any foreign currency gain or loss in connection with such disposition.\n\n** **\n\n**Net Investment Income Tax**\n\n \n\nCertain non-corporate U.S.\nholders may be subject to an additional 3.8% surtax on all or a portion of their “net investment income”, which may include\ndividends on, or capital gains recognized from, the disposition of, our Ordinary Shares. In each case, the 3.8% surtax applies only to\nthe extent the U.S. holder’s total adjusted income exceeds certain thresholds. U.S. holders are urged to consult their own tax advisors\nregarding the implications of the additional Net Investment Income tax on their investment in our Ordinary Shares.\n\n \n\n**Tax consequences if we are a passive foreign\ninvestment company**\n\n \n\nFor U.S. federal income tax\npurposes, we will be considered a passive foreign investment company, or PFIC, for any taxable year in which, after applying certain look-through\nrules, either (i) 75% or more of our gross income in a taxable year is “passive income,” referred to as the PFIC income test;\nor (ii) 50% or more of the value (determined on the basis of a quarterly average) of our assets in a taxable year produce or are held\nfor the production of passive income, referred to as the PFIC asset test. For this purpose, cash is considered to be an asset which produces\npassive income. Passive income includes dividends, interest, royalties, rents annuities, the excess of gains over losses from the disposition\nof certain assets which produce passive income and gains from commodities and securities transactions. If we own (directly or indirectly)\nat least 25% by value of the stock of another corporation, we will be treated for purposes of the foregoing tests as owning our proportionate\nshare of that other corporation’s assets and as directly earning our proportionate share of that other corporation’s income.\n\n \n\nBased on an analysis of our\nincome, assets and market capitalization, we believe that we were not a PFIC for our taxable year ended December 31, 2025. However, there\ncan be no assurance that the IRS will agree with our position or that the IRS could not successfully challenge our position. PFIC status\nis determined as of the end of the taxable year and is dependent on a number of factors, including the relative value of our passive assets\nand our non-passive assets, our market capitalization and the amount and type of our gross income. It is difficult to make accurate predictions\nof our future income, assets, activities and market capitalization, including fluctuations in the price of our Ordinary Shares which are\nrelevant to this determination. There can be no assurance that we will not become a PFIC for the current taxable year ending December\n31, 2026, or in a future taxable year. \n\n \n\nIf we are a PFIC, a U.S. holder\nof our Ordinary Shares could be subject to increased tax liability upon the sale or other disposition (including gain deemed recognized\nif the Ordinary Shares are used as security for a loan) of its Ordinary Shares or upon the receipt of distributions that are treated as\n“excess distributions”, which could result in a reduction in the after-tax return to such U.S. holder. In general, an excess\ndistribution is the amount of distributions received during a taxable year that exceed 125% of the average amount of distributions received\nby a U.S. holder in respect of the Ordinary Shares during the preceding three taxable years, or if shorter, during the U.S. holder’s\nholding period prior to the taxable year of the distribution. Under these rules, the distributions that are excess distributions and any\ngain on the disposition of Ordinary Shares would be allocated ratably over the U.S. holder’s holding period for the Ordinary Shares.\nThe amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we were a PFIC would be\ntaxed as ordinary income. The amount allocated to each of the other taxable years would be subject to tax at the highest marginal rate\nin effect for the applicable class of taxpayer for that taxable year, and an interest charge for the deemed deferral benefit would be\nimposed on the resulting tax allocated to such other taxable years. The tax liability with respect to the amount allocated to taxable\nyears prior to the year of the disposition or distribution cannot be offset by net operating losses. In addition, holders of stock in\na PFIC may not receive a “step-up” in basis on shares acquired from a decedent. Furthermore, if we are a PFIC, each U.S. holder\ngenerally will be required to file an annual report with the IRS.\n\n \n\n52\n\n \n\n \n\nIf we are a PFIC for any year\nduring which a U.S. holder holds our Ordinary Shares, we must generally continue to be treated as a PFIC by such U.S. holder for all succeeding\nyears during which such U.S. holder holds the Ordinary Shares, unless we cease to meet the requirements for PFIC status and such U.S.\nholder makes a “deemed sale” election with respect to the Ordinary Shares. If the election is made, the U.S. holder will be\ndeemed to sell the Ordinary Shares it holds at their fair market value on the last day of the last taxable year in which we qualified\nas a PFIC, and any gain recognized from such deemed sale would be taxed under the PFIC excess distributions regime. After the deemed sale\nelection, the U.S. holder’s Ordinary Shares would not be treated as shares of a PFIC unless we subsequently become a PFIC.\n\n \n\nAs an alternative to the tax\ntreatment described above, a U.S. holder could elect to treat us as a “qualified electing fund” (“QEF”), in which\ncase the U.S. holder would be required to include in income, for each taxable year that we are a PFIC, its pro rata share of our ordinary\nearnings as ordinary income and its pro rata share of our net capital gains as capital gain, subject to a separate election to defer payment\nof taxes where such deferral is subject to an interest charge. There is no assurance we will provide such information as the IRS may require\nin order for U.S. holders to report income and gain under a QEF election, if we are a PFIC. Moreover, there is no assurance that we will\nhave timely knowledge of our status as a PFIC in the future. Neither the Company nor its advisors have the duty to or will undertake to\ninform U.S. holders of changes in circumstances that would cause the Company to become a PFIC. The Company does not currently intend to\ntake the action necessary for a U.S. holder to make a “qualified electing fund” election in the event the Company is determined\nto be a PFIC. Prospective investors should assume that a QEF election will not be available.\n\n \n\nAs an alternative to making\na QEF election, a U.S. holder of PFIC stock which is “marketable stock” (e.g., “regularly traded” on the Nasdaq\nStock Market) may in certain circumstances avoid certain of the tax consequences generally applicable to holders of stock in a PFIC by\nelecting to mark the stock to market as of the beginning of such U.S. holder’s holding period for the Ordinary Shares. As a result\nof such election, in any taxable year that we are a PFIC, a U.S. holder generally would be required to report gain or loss to the extent\nof the difference between the fair market value of the Ordinary Shares at the end of the taxable year and such U.S. holder’s tax\nbasis in its Ordinary Shares at that time. Any gain under this computation, and any gain on an actual disposition of the Ordinary Shares\nin a year in which we are a PFIC, would be treated as ordinary income. Any loss under this computation, and any loss on an actual disposition\nof the Ordinary Shares in a year in which we are a PFIC, generally would be treated as ordinary loss to the extent of the cumulative net-mark-to-market\ngain previously included in income by the U.S. holder under the election for prior taxable years. Any remaining loss from marking Ordinary\nShares to market will not be allowed, and any remaining loss from an actual disposition of Ordinary Shares generally would be capital\nloss. A U.S. holder’s tax basis in its Ordinary Shares is adjusted annually for any gain or loss recognized under a mark-to-market\nelection. There can be no assurances that there will be sufficient trading volume with respect to the Ordinary Shares in order for the\nOrdinary Shares to be considered “regularly traded” or that our Ordinary Shares will continue to trade on the Nasdaq Stock\nMarket. Accordingly, there are no assurances that the Ordinary Shares will be marketable stock for these purposes. As with a QEF election,\na mark-to-market election is made on a shareholder-by-shareholder basis, applies to all Ordinary Shares held or subsequently acquired\nby an electing U.S. holder and can only be revoked with consent of the IRS (except to the extent the Ordinary Shares no longer constitute\n“marketable stock”).\n\n \n\nIf we are determined to be\na PFIC, the general tax treatment for U.S. holders described in this section would apply to indirect distributions and gains deemed to\nbe realized by U.S. holders in respect of any of our subsidiaries that also may be determined to be PFICs.\n\n \n\nIf a U.S. holder owns Ordinary\nShares during any year in which we are a PFIC and the U.S. holder recognized gain on a disposition of our Ordinary Shares or receives\ndistributions with respect to our ordinary shares, the U.S. holder generally will be required to file an IRS Form 8621 (Information Return\nby a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with respect to the Company, generally with the U.S.\nholder’s federal income tax return for that year. If our Company were a PFIC for a given taxable year, then you should consult your\ntax advisor concerning your annual filing requirements.\n\n \n\n53\n\n \n\n \n\n**The U.S. federal income\ntax rules relating to PFICs are very complex. U.S. holders are strongly urged to consult their own tax advisors with respect to the acquisition,\nownership and disposition of our Ordinary Shares, the consequences to them of an investment in a PFIC, any elections available with respect\nto our Ordinary Shares and the IRS information reporting obligations with respect to the acquisition, ownership and disposition of our\nOrdinary Shares.**\n\n \n\n**Tax return disclosure and backup withholding**\n\n \n\nA U.S. holder generally is\nsubject to information reporting and may be subject to backup withholding (currently at a rate of 24%) with respect to dividend payments\nmade with respect to, and proceeds from the disposition of, the Ordinary Shares. Backup withholding will not apply with respect to payments\nmade to exempt recipients, including corporations, or if a U.S. holder provides a correct taxpayer identification number and a duly executed\nIRS Form W-9 or certifies that such holder is not subject to backup withholding or otherwise establishes an exemption. Backup withholding\nis not an additional tax. It may be claimed as a credit against the U.S. federal income tax liability of a U.S. holder or the U.S. holder\nmay be eligible for a refund of any excess amounts withheld under the backup withholding rules, provided, in either case, that the required\ninformation is furnished to the Internal Revenue Service.\n\n \n\nThe Foreign Account Tax Compliance\nAct (“FATCA”) generally subjects U.S. individuals that hold certain specified foreign financial assets (which include stock\nof a non-U.S. corporation) to U.S. return disclosure obligations (and related penalties for failure to disclose). The definition of specified\nforeign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts\nmaintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for\ninvestment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. Such U.S. individuals are\nrequired to file IRS Form 8938, “Statement of Specified Foreign Financial Assets,” with their U.S. Federal income tax returns,\nif the aggregate value of all of these assets exceeds certain threshold amounts. Generally, U.S. holders may be subject to these reporting\nrequirements unless their Ordinary Shares are held in an account at a domestic financial institution or certain other exceptions apply.\nPenalties for failure to file certain of these information returns may be substantial. In addition, in the event a holder that is required\nto file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes\nof such holder for the related tax year may not close until three years after the date that the required return information is filed.\nEach U.S. holder is urged to consult with its own tax advisors regarding its obligation to file an IRS Form 8938 in light of its own particular\ncircumstances.\n\n** **\n\n**Non-U.S. Holders of Ordinary Shares**\n\n \n\nExcept as provided below,\na non-U.S. holder of Ordinary Shares will not be subject to U.S. federal income or withholding tax on the receipt of dividends on, and\nthe proceeds from the disposition of, an Ordinary Share, unless that item is effectively connected with the conduct by the non-U.S. holder\nof a trade or business in the United States and, in the case of a resident of a country which has an income tax treaty with the United\nStates, that item is attributable to a permanent establishment in the United States or, in the case of an individual, a fixed place of\nbusiness in the United States. In addition, gain recognized by an individual non-U.S. holder on the disposition of the Ordinary Shares\nwill be subject to tax in the United States, if such non-U.S. holder is present in the United States for 183 days or more during the taxable\nyear of the sale and other conditions are met.\n\n \n\nNon-U.S. holders are generally\nnot subject to information reporting or backup withholding with respect to the payment of dividends on, or proceeds from the disposition\nof, Ordinary Shares, provided that the non-U.S. holder provides its taxpayer identification number, certifies to its foreign status or\notherwise establishes an exemption.\n\n \n\nA non-U.S. holder will be required to\nprovide a certificate of non-U.S. status on an appropriate IRS Form W-8.\n\n \n\n**10F.\nDividends and Paying Agents**\n\n \n\nNot applicable.\n\n \n\n54\n\n \n\n \n\n**10G.\nStatement by Experts**\n\n \n\nNot applicable.\n\n \n\n**10H.\nDocuments on Display**\n\n \n\nYou may read and copy this\nannual report on Form 20-F, including the related exhibits and schedules, and any document we file with the SEC through the SEC’s\nwebsite at http://www.sec.gov.\n\n \n\nWe maintain a corporate website\nat *www.boscorporate.com.* Information contained on, or that can be accessed through, our website does not constitute a part of this\nannual report on Form 20-F. We have included our website address in this annual report on Form 20-F solely as an inactive textual reference.\n\n \n\nThe documents concerning the\nCompany that are referred to in the form may be inspected at the Company’s office in Israel.\n\n \n\n**10I.\nSubsidiary Information**\n\n \n\nFor information relating to\nthe Company’s subsidiaries, see “Item 4C. Organizational Structure” as well as the Company’s Consolidated Financial\nStatements (Items 8 and 18 of this form). \n\n \n\n**10J.\nAnnual Report to Securityholders**\n\n** **\n\nNot Applicable"}