<SEC-DOCUMENT>0001144204-15-037696.txt : 20150617
<SEC-HEADER>0001144204-15-037696.hdr.sgml : 20150617
<ACCEPTANCE-DATETIME>20150617171554
ACCESSION NUMBER:		0001144204-15-037696
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20150617
DATE AS OF CHANGE:		20150617

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SuperCom Ltd
		CENTRAL INDEX KEY:			0001291855
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			L3
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-197434
		FILM NUMBER:		15937855

	BUSINESS ADDRESS:	
		STREET 1:		1 ARIE SHENKAR STREET
		CITY:			HERTZLIYA
		STATE:			L3
		ZIP:			4672501
		BUSINESS PHONE:		972-9-889-0800

	MAIL ADDRESS:	
		STREET 1:		1 ARIE SHENKAR STREET
		CITY:			HERTZLIYA
		STATE:			L3
		ZIP:			4672501

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Vuance Ltd
		DATE OF NAME CHANGE:	20101019

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Vuance
		DATE OF NAME CHANGE:	20070508

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SuperCom Ltd.
		DATE OF NAME CHANGE:	20040526
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>v413405_424b5.htm
<DESCRIPTION>FORM 424B5
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="color: red; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><B>The information in this
preliminary prospectus supplement is not complete and may be changed. A registration statement relating to these securities has
been declared effective by the Securities and Exchange Commission. This preliminary prospectus supplement and the accompanying
prospectus are not an offer to sell these securities, and we are not soliciting offers to buy these securities, in any state where
the offer or sale is not permitted. </B></P>

<P STYLE="color: red; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 1in; text-align: right"><B>Filed pursuant to Rule 424(b)(5)
<BR>
Registration No. 333-197434</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 1in; text-align: right"><B>&nbsp;</B></P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 70%; font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif; color: red"><b>PRELIMINARY PROSPECTUS SUPPLEMENT (Subject to Completion)</b></font></td>
    <td style="width: 30%; text-align: right; font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif; color: red"><b>Dated June 17, 2015</b></font></td></tr>
<tr style="vertical-align: top">
    <td style="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif; color: red"><b>(to Prospectus dated July 25, 2014)</b></font></td>
    <td style="font-size: 10pt">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; border-bottom: rgb(31,73,125) 3pt solid"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 2in; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Shares</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><IMG SRC="tlogo.jpg" ALT=""></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 12pt Arial, Helvetica, Sans-Serif"><B>Ordinary
Shares</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">We are offering ordinary shares.
Our ordinary shares are listed for trading on The NASDAQ Capital Market under the symbol &ldquo;SPCB.&rdquo; On June 16, 2015,
the last reported sale price of our ordinary shares was $13.78</FONT> <FONT STYLE="font-size: 10pt">per share.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">Our business and an investment in our ordinary shares involve
significant risks. These risks are described under the caption &ldquo;Risk Factors&rdquo; beginning on page S-13 of this
prospectus supplement and page 2 of the accompanying prospectus and in the documents incorporated by reference into this prospectus
supplement<B>.</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; border-bottom: Black 1pt solid">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>



<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="width: 74%">&nbsp;</td>
    <TD NOWRAP STYLE="width: 1%; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 12%; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b><i>Per Share</i></b></font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 12%; border-bottom: black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b><i>Total</i></b></font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>Public offering price</b></font></td>
    <TD>&nbsp;</td>
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">$</font></td>
    <TD>&nbsp;</td>
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">$</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>Underwriting discount<sup> (1)</sup></b></font></td>
    <TD>&nbsp;</td>
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">$</font></td>
    <TD>&nbsp;</td>
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">$</font></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Proceeds, before expenses, to SuperCom</B></FONT></td>
    <TD>&nbsp;</td>
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">$</font></td>
    <TD>&nbsp;</td>
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">$</font></td></tr>
</table>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt; color: black">(1)</FONT></TD><TD><FONT STYLE="font-size: 10pt">We refer you to &ldquo;Underwriting&rdquo; beginning on page S-</FONT>38<B> </B><FONT STYLE="font-size: 10pt">of
this prospectus supplement for additional information regarding total underwriting compensation.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">The underwriters may also purchase up to an additional &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
shares from us at the public offering price, less the underwriting discount, within 30 days of the date of this prospectus supplement
to cover over-allotments. If the underwriters exercise this option in full, the total discount will be $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and the total net proceeds
to us, before expenses, will be $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">The underwriters expect to deliver the ordinary shares against
payment in New York, New York on or about  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2015.</P>



<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; border-bottom: Black 1pt solid">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B><I>Sole Book-runner</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>Cowen and Company</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 26.9pt; text-align: center; text-indent: 0.5in">, 2015.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 26.9pt; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS</B><BR>
<B>PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 90%"><A HREF="#a_001"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">ABOUT THIS PROSPECTUS SUPPLEMENT</FONT></A></TD>
    <TD STYLE="text-align: right; width: 10%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-ii</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_002"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">PROSPECTUS SUPPLEMENT SUMMARY</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-1</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_003"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">THE OFFERING</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-12</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_004"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">RISK FACTORS</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-13</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_005"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-28</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_006"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">USE OF PROCEEDS</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-29</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_007"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">PRICE RANGE OF OUR ORDINARY SHARES</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-30</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_008"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">DIVIDEND POLICY</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-31</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_009"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">DILUTION</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-31</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_0015">MATERIAL TAX CONSIDERATIONS</A></TD>
    <TD STYLE="text-align: right">S-32</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_010"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">UNDERWRITING</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-38</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_011"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">LEGAL MATTERS</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-43</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_012"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">EXPERTS</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-43</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_013"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">WHERE YOU CAN FIND MORE INFORMATION</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-43</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><A HREF="#a_014"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</FONT></A></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">S-43</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 90%"><font style="font: 10pt Arial, Helvetica, Sans-Serif">PROSPECTUS SUMMARY</font></td>
    <TD STYLE="width: 10%; text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">RISK FACTORS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">FORWARD-LOOKING STATEMENTS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">15</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">RATIO OF EARNINGS TO FIXED CHARGES</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">16</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">CAPITALIZATION AND INDEBTEDNESS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">16</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">MARKET FOR OUR ORDINARY SHARES</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">16</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">USE OF PROCEEDS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">17</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">PLAN OF DISTRIBUTION</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">17</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">DESCRIPTION OF ORDINARY SHARES</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">20</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">DESCRIPTION OF WARRANTS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">24</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">DESCRIPTION OF DEBT SECURITIES</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">25</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">FOREIGN EXCHANGE CONTROLS AND OTHER LIMITATIONS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">28</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">AUTHORIZED REPRESENTATIVE</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">28</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">OFFERING EXPENSES</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">28</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">LEGAL MATTERS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">EXPERTS</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">WHERE YOU CAN FIND MORE INFORMATION</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font: 10pt Arial, Helvetica, Sans-Serif">ENFORCEABILITY OF CIVIL LIABILITIES</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">30</font></td></tr>
</table>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"></P>

<DIV STYLE="border: Black 1pt solid; padding-right: 5pt; padding-left: 5pt; width: 99%">

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_001"></A>ABOUT THIS PROSPECTUS
SUPPLEMENT</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">This document is in two parts. The first
part is this prospectus supplement, which describes the specific terms of this offering of ordinary shares. The second part is the
accompanying prospectus, which provides more general information, some of which may not apply to this offering. The information
included or incorporated by reference in this prospectus supplement also adds to, updates and changes information contained or
incorporated by reference in the accompanying prospectus. If information included or incorporated by reference in this prospectus
supplement is inconsistent with the accompanying prospectus or the information incorporated by reference therein, then this prospectus
supplement or the information incorporated by reference in this prospectus supplement will apply and will supersede the information
in the accompanying prospectus and the documents incorporated by reference therein, including without limitation Item 4.A. and
Item 4.B. of our Annual Report on Form 20-F for the year ended December 31, 2014, filed with the Securities and Exchange Commission
on April 13, 2015.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">This prospectus supplement is part of a
registration statement that we filed with the Securities and Exchange Commission, or SEC, using a &ldquo;shelf&rdquo; registration
process. Under the shelf registration process, we may from time to time offer and sell any combination of the securities described
in the accompanying prospectus up to a total dollar amount of $50 million, of which this offering is a part.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B>You should rely only on the information
contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and any free writing prospectus
prepared by us or on our behalf. We have not, and the underwriters have not, authorized any other
person to provide you with different. If anyone provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriters are not, making an offer to sell or soliciting an offer to buy these securities under any
circumstance in any jurisdiction where the offer or solicitation is not permitted. You should assume that the information contained
in this prospectus supplement, the accompanying prospectus and any free writing prospectus prepared by us or on our behalf is accurate
only as of the date of the respective document in which the information appears, and that any information in documents that we
have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time
of delivery of this prospectus supplement or any sale of a security. Our business, financial condition, results of operations and
prospects may have changed since those dates.</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We are offering to sell,
and seeking offers to buy, ordinary shares only in jurisdictions where offers and sales are permitted. The distribution of this
prospectus supplement and the accompanying prospectus and the offering of the ordinary shares in certain jurisdictions may be restricted
by law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus
must inform themselves about, and observe any restrictions relating to, the offering of the ordinary shares and the distribution
of this prospectus supplement and the accompanying prospectus outside the United States. This prospectus supplement and the accompanying
prospectus do not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any
securities offered by this prospectus supplement and the accompanying prospectus by any person in any jurisdiction in which it
is unlawful for such person to make such an offer or solicitation.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">This prospectus supplement,
the accompanying prospectus, and the information incorporated herein and therein by reference includes trademarks, service marks
and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference
into this prospectus supplement or the accompanying prospectus are the property of their respective owners.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">All references in this
prospectus supplement and the accompanying prospectus to &ldquo;SuperCom,&rdquo; the &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo;
&ldquo;our,&rdquo; or similar references refer to SuperCom Ltd., a company organized under the laws of the State of Israel, and
its subsidiaries taken as a whole, except where the context otherwise requires or as otherwise indicated. <FONT STYLE="color: black">In
this prospectus supplement, unless otherwise specified or unless the context otherwise requires, all references to &quot;$&quot;
or &quot;dollars&quot; are to U.S. dollars and all references to &quot;NIS&quot; are to New Israeli Shekels. Except as otherwise
indicated, the financial statements of and information regarding SuperCom are presented in U.S. dollars in accordance with generally
acceptable accounting principles in the United States of America. The representative  exchange rate between the NIS and the
dollar as published by the Bank of Israel and effective on June 15, 2015, was NIS 3.842 per $1.00.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

</DIV>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_002"></A>PROSPECTUS SUPPLEMENT
SUMMARY</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>This summary provides an overview of
selected information contained elsewhere in this prospectus supplement and the accompanying prospectus and does not contain all
of the information you should consider before making your investment decision. Before investing in our ordinary shares, you should
carefully read this entire prospectus supplement and the accompanying prospectus and the information incorporated herein and therein
by reference, including our financial statements and the related notes included elsewhere in this prospectus supplement and the
accompanying prospectus. You should also consider, among other things, the matters described under &quot;Risk Factors&quot; beginning
on page 2 and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; in each
case appearing elsewhere in this prospectus supplement and the accompanying prospectus and the information incorporated herein
and therein by reference. As used in this prospectus supplement and the accompanying prospectus, the terms &quot;we,&quot; &quot;our,&quot;
&quot;us,&quot; or &quot;the Company&quot; refer to SuperCom Ltd. and its subsidiaries, taken as a whole, unless the context otherwise</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><I>indicates.</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>History and Development of the Company</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">SuperCom Ltd. is a company organized under
the laws of the State of Israel. The Company was incorporated in 1988. Our registered office is located at 1 Arie Shenkar, Herzlia,
Israel, 4672501, telephone number +972-9-889-0880. Our agent in the United States is SuperCom, Inc., and is located at 200 Park
Avenue South, New York, New York, telephone number +1 (212) 675-4606. Our authorized capital stock consists of 18,000,000 ordinary
shares of which 13,840,349 were issued and outstanding as June 12, 2015.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Since the beginning of 2012, we have focused
on leveraging our experience in the e-ID market and increasing our position in the market by: (i) proposing new technologies and
solutions to our existing e-ID customers, (ii) securing other e-ID projects and (iii) retaining an outstanding group of market
executives and experts, which allowed us to propose and implement what we believe to be competitive ID and e-ID solutions to the
global markets.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">During 2012, we entered into the growing
electronic monitoring vertical markets for public safety, real time healthcare and homecare, and animal and livestock management,
using our M2M suite of products.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">On December 26, 2013 we acquired the SmartID&trade;
division of On Track Innovations Ltd., or OTI, including all contracts, software, other related technologies and intellectual property
assets. We paid OTI $8.8 million ($10 million less certain closing adjustments) at the closing and agreed to make contingent payments
of up to $12.5 million pursuant to an earn-out mechanism based on certain performance and other milestones. As of December 31,
2014, we have paid $1 million under this earn-out mechanism.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">During 2014, we identified the secure mobile
payments market as a fast growing market where we can leverage synergistic technologies and a shared customer base to our e-ID
division. During 2014, we also developed and introduced the SuperPay&trade; suite of products for secure mobile payments.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><B>Company Overview</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We are a global provider of traditional
and digital identity solutions, providing advanced safety, identification, tracking and security products to governments and public
organizations throughout the world. We offer three lines of products, our e-ID platform and solutions, from which we derive the
majority of our revenue, our M2M/IoT suite and services and our Secure Mobile Payments (SMP) suite and solutions.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>e-ID Platform and Solutions</I>. Through
our proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance
and border control services, we have helped governments and national agencies design and issue secured multi-ID documents and robust
digital identity solutions to their citizens and visitors. Our e-ID division engages in several activities and solutions, including
the production of: (i) paper secured by different levels of security patterns (i.e., ultraviolet, holograms, etc.) and (ii) electronic
identification secured by biometric data, principally used in connection with the issuance of national multi-ID documents (including
IDs, passports, driver&rsquo;s licenses, vehicle permits, and visas), border control applications, national ID registries, electronic
passports, biometric visas, automated fingerprint identification systems, digitized driver&rsquo;s licenses, and electronic voter
registration and election management. Our solutions include MAGNA&trade;, a complete end-to-end solution for the electronic identification
documents</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

</DIV>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="color: windowtext">and systems listed above. Customers
of our e-ID division include governments in Europe, Asia and Africa. On December 26, 2013, we acquired the SmartID</FONT><FONT STYLE="color: #222222">&trade;</FONT><FONT STYLE="color: windowtext">
division of On Track Innovations Ltd., or OTI, including all contracts, software, other related technologies and IP assets. The
SmartID<SUP>TM</SUP> division has a strong international presence, with a broad range of competitive and well-known e-ID solutions
and technology. The acquisition significantly expanded the breadth of our e-ID capabilities globally, while providing us with outstanding
market and technological experts, together with advanced ID software platforms and technologies.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>M2M/IoT Suite and Services</I>. Our
M2M solutions are designed to reliably identify, track and monitor people or objects in real time, enabling our customers to detect
the unauthorized movement of people, vehicles and other monitored objects. We provide RFID and mobile technology, accompanied by
services specifically tailored to meet the requirements of electronic monitoring. Our propriety M2M suite of hybrid hardware and
software components is the foundation of these products and services. This suite can be used in various industries, including healthcare
and homecare, security and safety, community public safety, law enforcement, electronic monitoring, livestock monitoring and building
and access automation. Our M2M division has primarily focused on growing three markets: (i) public safety, (ii) healthcare and
homecare and (iii) animal and livestock management.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>SMP Suite and Solutions</I>. During
2014, we identified the secure mobile payments market as a fast growing market where we can leverage synergistic technologies and
a shared customer base to our e-ID division. Our SMP division offers a product called SuperPay<SUP>TM</SUP> with a suite of solutions
for advanced secure mobile payments and financial services, ranging from mobile wallet to mobile point of service (POS). SuperPay<SUP>TM</SUP>
allows customers to securely make payments using a mobile device (smartphones, tablets or traditional 2G/3G handsets) and allows
merchants to use a smartphone, tablet or any existing POS to receive secure mobile payments. SuperPay<SUP>TM</SUP> features an
array of payment technologies including near field communication (NFC) using host card emulation (HCE), bluetooth low energy (BLE)
and audio, and secures payment by using one-time password (OTP), biometric authentication, and SuperCom's proprietary SafeMoney<SUP>TM</SUP>
platform.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Market Opportunity</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We believe that our wide range of solutions
offers us several opportunities across global markets and industries. The overall e-ID market remains strong. Our addressable market
includes both developing and developed countries. The acquisition of the SmartID<SUP>TM</SUP> division of OTI in late 2013 is bolstering
our ability to win business around the world. The acquisition diversified our source of revenues and offered us access to new markets
in Africa, Asia, and South America, all areas with great potential.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We plan to grow the e-ID division organically,
by adding new e-ID government customers and by offering more services to existing customers. We believe that our platform is agile
and scalable, meaning that once a customer is using one of our applications, it is easy to add additional applications and services,
which can increase a client&rsquo;s return on their investment. In addition, and as a result of successful integration of SuperCom
and the SmartID<SUP>TM</SUP> division, we are now well-positioned to work on larger international tenders. Leading into 2015, we
began actively bidding on larger international tenders in markets where we see significant opportunities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The opportunities we see in our e-ID segment
may have an impact on the number of opportunities in our M2M and SMP segments as well. We have begun to leverage our e-ID existing
customer base, and we believe that the expertise and robust innovative solutions in these two segments represent a significant
opportunity for SuperCom.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We began marketing our M2M suite to customers
in the United States and in Europe, South America and Africa in 2014. We have been in discussions with several potential customers
in the United States, Europe and Asia who have issued tenders to which we have actively responded in the public safety segment.
These tenders<B> </B>range in size from a couple of hundred to a couple of thousand units and we believe we are well positioned
to win new contracts in the second half of 2015.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">RFID is now a widely-adopted technology
in the auto-identification market, which addresses electronic identification and location of objects. Typically, an RFID tag or
transponder is incorporated into or attached to a product or person, and a handheld or stationary device that receives the radio
frequency waves from these tags is used to determine their locations. Prior to the adoption of RFID, users identified and tracked
assets manually and through the use of bar code technology. These solutions were limited because of the need for ongoing human
intervention and the lack of</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">instantaneous location capabilities. RFID technology possesses
greater range, accuracy, speed and lower line-of-sight requirements than bar code technology.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition, there is always demand for
better security systems and services. We believe that personnel and asset management are now leading security concerns in commercial
and governmental enterprises, and that this should drive an increasing demand for secure, precise and cost-effective means to positively
identify, locate, track, monitor, count and protect people and objects, including inventory and vehicles. Our wireless ID-enabled
security solutions provide an optimal solution to these problems as our solutions reliably identify and track the movement of people
and objects in real time, enabling our customers to detect unauthorized movement of vehicles as well as trace packages, containers
and the access to premises by control personnel and vehicles.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">With respect to our SMP division, research
indicates that 2.5 billion people globally are un-banked (meaning they have no bank account or credit card), but over 1 billion
of those people have access to mobile phones, which represents our SMP applicable market. We presented our mobile money and mobile
payment suite at several large payment conferences and the global market interest to our solution is very encouraging. We believe
that our ability to capture even a small portion of this fast growing market would represent a significant and long-term growth
opportunity.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Our Strategy</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We are focused on our core competencies,
which are comprised of our e-ID platform and solutions, our M2M suite and solutions and our SMP suite and solutions. Our growth
strategy includes the following components:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Develop strong strategic relationships with our business partners,
including the systems integrators and representatives that introduce our products and solutions into their respective markets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Employ dedicated sales personnel to work closely with our business
partners. Our sales personnel will customize and adapt solutions that can then be installed and supported by these business partners.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Expand our M2M activities globally, particularly in Americas, Europe,
and the Far East.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Leverage our customer base, M2M/IoT hybrid suite of M2M solutions,
and IT management capabilities to secure additional long-term contracts with governments and communities in the public safety markets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Leverage our reputation, talented personnel, and project management
capabilities in the e-ID market to secure additional projects and solutions in the growing e-ID and e-Government markets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Leverage our customer base, SuperPay&trade; hybrid suite of SMP solutions,
and IT management capabilities to secure additional long-term contracts with governments and communities in the secure mobile payments
market.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Develop strong strategic relationships with business partners that
will introduce our solutions into the healthcare, homecare, animal and livestock management markets. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Develop strong strategic relationships with business partners in the
financial services industry, and un-banked and mobile payments markets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Identify and acquire synergistic contracts or businesses in order
to reduce time to market, obtain complementary technologies and secure required references for international bids.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Grow our business in emerging markets with perceived significant growth
opportunities.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We plan to target the following markets:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Additional national e-ID and e-Government clients with our e-ID technologies
and products.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Public safety, including law enforcement agencies, community safety
agencies and ministries of justice around the world, with our electronics monitoring, or EM, solutions, including electronic identification,
monitoring and </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in">tracking solutions for house arrests, GPS tracking,
inmate control, detainee monitoring, juvenile supervision and tracking of persons returned to communities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Financial services market through our SMP suite and solutions.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Airports and ports with both our M2M and e-ID products and solutions.
Our M2M products can help common carriers monitor, track, locate and manage multiple baggage items simultaneously, thereby reducing
the risk of lost baggage, increasing customer service and improving security. Our e-ID solutions can offer airports and ports turnkey
border control systems. Our border control system is based on passenger biometric identification applications, electronic passport
identification, and both optical and electronic means to detect forged passports. The system, which is operable whether it is online
or offline, enables border control officers to receive accurate identification based on a combination of two machine-readable biometric
applications: fingerprints and facial recognition. We offer short implementation and quick integration with the existing border
control system of the country and provide external interfaces to digital certificate authority for signature verification as well
as interfaces to other agencies.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Businesses and industrial companies with our M2M/IoT suite, which
can be used by businesses, shippers and warehouse operators to manage and track cartons, pallets, containers and individual items
in order to facilitate movement, pick up orders, verify inventory and reduce delivery time. In addition, industrial companies can
manage and track their mobile equipment and tools. We believe that our M2M/IoT Suite can increase efficiency at every stage of
asset, inventory and supply chain management by enabling long-range identification and location of products and removing the need
for their human visual identification. Our products also work in conjunction with existing bar coding and warehouse systems to
reduce the risk of loss, theft and slow speed of transfer.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Hospitals and homecare with our M2M products. The healthcare sector
has successfully utilized M2M technologies for the purposes of infant protection in maternity wards and resident safety in care
homes similar to our asset and personnel location and identification system targeted at the secure facility and hazardous business
sectors. Our PureRF&trade; Suite can provide solutions for the healthcare sector for asset, staff, patient and medical record location
and identification. We believe that as hospitals continue to upgrade their security measures, M2M technology will be utilized in
real-time location systems that are designed to immediately locate persons, equipment and objects within the hospital.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Animal and livestock owners with our M2M products. Farmers may use
our M2M system to collect, analyze and detect critical heat and health issues. In addition, the system provides rumination monitoring
consisting of health and reproduction intelligence, which optimizes milk production per cow. Pet owners may also use our M2M solutions,
which provide the ability to locate, track and monitor their pets at a very low cost. Animal and livestock owners may use our M2M
solutions to identify, locate, monitor and track herds and animals, as well as monitor their lifecycle.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Our Solutions and Products</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>e-ID and e-Government (e-ID) Division
Products and Solutions</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We have been active in the national ID
and e-Government industry for more than 25 years. We work with governments and public sectors, and we believe SuperCom e-ID is
an internationally recognized competitor in the design, development, integration and delivery of highly secured national ID and
e-Government solutions.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We offer a complete end-to-end in-house
solution for credentialing, identifying and verifying individuals by combining the capability to support biometric identification
with the portability of smart cards. Most of our products are based on a common platform, which we refer to as MAGNA&trade;, a
complete end-to-end solution for such items as e-passports, national identity cards, voter identification cards and drivers&rsquo;
licenses. Our solution covers everything necessary for a government to offer a particular service to the public: business process
engineering, solution design and integration, hardware and software implementation, operator and technician training. The solution
covers all workflows, managerial and operational reports, and it interfaces directly with the government&rsquo;s business activity.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="color: windowtext">In addition,
our</FONT><FONT STYLE="color: red"> </FONT><FONT STYLE="color: windowtext">e-ID division offers a variety of related services,
including: requirements extraction and system design, project management, project operation, training, operational processes optimization,
assimilation, project financing (under BOT/PPP scheme), knowledge transfer, fee collection, maintenance and support and more.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We believe our e-ID systems comply with
regional and international standards and enhance usability by using smart card applications. Our systems&rsquo; central servers
include redundancy capabilities that provide disaster recovery or failover between sites. All solutions issue financial, accountability,
transaction auditing and management information reports, which decrease the likelihood of tampering and fraud by individuals.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our products combine the portability of
smart cards with the capability to support advanced identification and authentication technology and manage significant amounts
of information. Our MAGNA&trade; modular platform offers short implementation and quick integration with the existing border control system
of a country and provides external interfaces to digital certificate authority for signature verification, as well as interfaces
to other agencies. It offers a migration path to additional e-Government applications and to additional electronic ID documents,
such as national IDs, voter IDs and drivers&rsquo; licenses. Our platform can be customized to support a large number of applications,
and it has been deployed in different e-passport/national ID contracts worldwide. It is also being developed for additional applications,
such as medical services.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our border control system is based on passenger
biometric identification applications, electronic passport identification, and both optical and electronic means of detecting forged
passports. The system, operable online or offline, enables border control officers to receive accurate identification based on
a combination of two machine-readable biometric applications: fingerprints and facial recognition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B><I>M2M/IoT Division Products and Solutions</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our M2M/IoT division features an all-in-one
active RFID technology accompanied by services specifically tailored to meet the requirements of the applicable industries, primarily:
(i) public safety, (ii) healthcare and homecare, and (iii) animal and livestock management. Our PureRF&trade; suite assists companies
in efficiently utilizing time and resources. We believe it has a number of advantages over other products for remote hands-off
authentication, validation, identification, location and real-time monitoring of valuable personal resources and assets.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Equipped with complex IT knowledge and
experience, our senior personnel from the M2M industry and our suite of products and software can customize M2M programs and solutions
at all levels, from tags to readers to servers, and at all stages, from installation to monitoring.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>PureRF&trade; Suite</I>. Our PureRF&trade;
Suite provides a secure, precise and cost-effective means to positively identify, locate, track, monitor, count and protect people
and objects, including inventory and vehicles. Our PureRF&trade; Suite is a complete location position, or LP, system solution
based on active RFID tag technology that provides commercial customers and governmental agencies enhanced asset management capabilities.
The basic components of our PureRF&trade; Suite include:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>PureRF&trade; Tags. </I>The PureRF&trade;
solution relies on small, low-powered PureRF&trade; tags that are attached to objects or people. These weatherproof and shock-resistant
tags are inexpensive and attach easily to key chains, uniform equipment, property, or vehicles to allow identification and tracking
wherever it is needed. License-free radio bands are used to track RF signals and can be read on handheld devices. Transmitters
can be programmed for periodic or event-driven transmissions. For high-security sites or situations, encrypted tag-to-reader communication
prevents cloning or copying. An integrated anti-collision algorithm allows multiple tags to be simultaneously identified by a single
reader, allowing employees to be matched to individual laptops or assets, shipping pallets to merchandise, assets to &ldquo;authorized&rdquo;
locations and drivers to specific vehicles.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Hands-Free Long-Range RFID Asset Tags.
</I>These tags provide real-time asset loss prevention, inventory management, and personnel/asset tracking. They identify and track
laptops, office machines, computer systems, tools, and telephones. They also identify employees and visitors in office buildings,
hospitals, retail stores, warehouses, industrial facilities, mines and military installations.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Hands-Free Long-Range RFID Vehicle Tags.
</I>These tags provide long-range vehicle ID for parking and fleet management, access control, asset loss prevention at airports,
gated communities, truck and bus terminals, employee parking lots, hospitals, industrial facilities, railroads, mines and military
installations.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>PureRF&trade; Readers. </I>Our PureRF&trade;
reader is used to receive status messages from PureRF&trade; tags. The PureRF&trade; reader is an intelligent, reliable and effective
small long-range RFID reader with an integrated protocol converter. The protocol converter supports various standard interfaces
such as 26 bit Wiegand format, serial RS-232, serial RS-485 or TCP/IP (Ethernet) protocols, which can be utilized in various solutions.
Range-adjustable antennas can be discretely hidden to identify and track PureRF&trade; tag activity. PureRF&trade; readers can
operate individually for small applications or in a network to cover wide areas. The units are small, reliable and effective and
can be controlled by multiple communications media.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>PureRF&trade; Activators. </I>PureRF&trade;
activators are used to improve the accuracy of locating assets compared to what is provided by the receiver ID. They are used primarily
at entrances and exits. For this purpose, PureRF&trade; activators are deployed throughout the monitored space where improved tag
location measurement is required. The PureRF&trade; activators continually transmit a short-range uniquely identifying LF signal.
Tags can read this signal when they are close to the activator (up to about 24 feet). The activator ID that a tag reads is added
to the message that the tag transmits to the receiver. An activator&rsquo;s ID indicates the location of a PureRF&trade; tag.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>PureRF&trade; Initializer</I>. A PureRF&trade;
initializer is a device that integrates an LF transmitter and an RF receiver into one device. This enables the PureRF&trade; initializer
to perform bi-directional communication with the tags. The PureRF&trade; initializer is used to control a tag&rsquo;s mode of operation
(on/off) and to set or modify a tag&rsquo;s operational parameters, such as transmission frequency (timing) and activated sensors.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Secure Mobile Payments Division Products and Solutions</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our SMP division offers a full suite of
solutions, ranging from mobile wallet to mobile POS using a set of components and platforms to enable secure mobile payments and
financial services. Our SMP products are device agnostic, allowing customers to securely make payments using any mobile device
(including smartphones, tablets or traditional 2G/3G handsets) and allowing merchants to use any smartphone, tablet or any existing
POS to receive secure mobile payments.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our SMP products and solutions include:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="color: windowtext"><I>SuperPay<SUP>TM</SUP>
Suite.</I> SuperPay<SUP>TM</SUP> </FONT><FONT STYLE="color: #222222">is a secure mobile payment hybrid suite that allows mobile
users to securely make payments while supporting 2G phones, 3G phones and smartphones. SuperPay<SUP>TM</SUP> features a number
of secure payment methods including near field communication using host card emulation, blue-tooth low energy, Ultra-Sonic, and
utilizes biometric authentication features already integrated in advanced smartphones such as iPhone 6&rsquo;s Touch ID, Samsung
5&rsquo;s fingerprint scanner, or external biometric authentication.</FONT></P>

<P STYLE="color: #222222; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="color: #222222; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>PureMoney Suite</I>.
Our PureMoney Suite provides a wide range of mobile money applications and services using a hybrid of components and services to
enable secure mobile transactions. PureMoney features a number of secure money transfer methods including USSD, WAP, Wi-Fi, 3G,
and SuperPay<SUP>TM</SUP>. It utilizes biometric authentication features already integrated in advanced smartphones such as iPhone
6, Samsung 5, or external biometric authentication. This means that 2G, 3G and smartphone owners can all use PureMoney. We believe
that the PureMoney Suite for smartphones is the first to introduce a built-in mobile security threat scanner, allowing usage under
uncontrolled network channels by identifying and neutralizing threats and suspicious activities.</P>

<P STYLE="color: #222222; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="color: #222222; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>SuperPOS&trade;</I>.
SuperPOS&trade; is a new platform which allows any mobile phones to perform mobile payments by turning any iOS- or Android-based
tablets or smartphones into a robust secure mobile payment POS. SuperPOS&trade; supports a number of ways to pay, including near
field communication, blue-tooth low energy, Ultra-Sonic and host card emulation, and utilizes biometric authentication features.
Mass transit channels, retail chain stores, and mom-and-pop shops globally may utilize this mobile payment opportunity by simply
turning their tablet or smartphone into a secure POS device using the SuperPOS&trade; application.</P>

<P STYLE="color: #222222; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="color: #222222; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>SafeMoney for Smartphones</I>.
SafeMoney is a built-in mobile automated security threat scanner providing secure usability under uncontrolled network channels
by identifying and neutralizing threats and suspicious activities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>


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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1pt solid; width: 99%">

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Sales and Marketing</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We sell our systems and products worldwide
through local representatives, subsidiaries and distribution channels that include direct sales and marketing through representatives.
We currently have 18 employees that are directly engaged in the sale, distribution and support of our products through centralized
marketing offices in distinct world regions, including the employees of our subsidiaries in the United States, Ecuador, Panama
and Tanzania, who sell and support our products in their regions. We are also represented by several independent representatives.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We establish relationships with representatives
through agreements that provide for the marketing of our systems and products. These agreements generally do not grant exclusivity
to the representatives and, as a general matter, are not long-term contracts, do not have commitments for minimum sales and may
be terminated by the representative. We do not have agreements with all of our representatives.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Key</B> <B>Customer Contracts</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">On March 25, 2014, we entered into an agreement
whereby we provide consulting services for the design, development, implementation, commissioning and maintenance of a government
customer&rsquo;s new e-Government system. The agreement provides for a total contract sum of approximately $24 million, payable
upon the completion of certain milestones. Phase I of the agreement consists of the design and implementation of the new system
for an aggregate contract price of approximately $18 million. We received over 25% of this amount as advance payment for Phase
I, and receive the remainder upon certain milestones during Phase I. Phase I is scheduled to last approximately 18 months. Under
Phase II of this agreement, we will provide maintenance services for the five-year period following the system becoming operational
in Phase I. The aggregate contract price for Phase II is $6 million, which will be comprised of a 25% advance payment at the onset
of Phase II, with the remaining 75% paid in quarterly installments. This contract contains customary termination provisions for
both parties. In addition, the customer may terminate the agreement, in whole or in part, at any time for its convenience.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">On September 22, 2014, we entered into an
agreement as contractor to a private company that was awarded an e-Government project in another country, for the design and implementation
of three e-ID sub-systems along with support and maintenance services for the entire project. The agreement provides for a total
contract price of approximately $19 million, payable upon the completion of certain milestones. The initial phase of the contract
consists of the design and implementation of the sub-systems for an aggregate contract price of $14.3 million. We received $5.6
million of this amount as advance payment for the initial phase, and receive the remainder upon certain milestones during this
phase. The initial phase is scheduled to last approximately 9 months. Following the systems becoming operational in the initial
phase, we will provide maintenance services for a three-year period. The aggregate contract price for service and maintenance during
this period is $4.5 million, which will be paid in quarterly installments. This contract contains customary termination provisions
for both parties.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Principal Markets</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following table provides a breakdown
of total revenue by geographic market for the three years ended December 31, 2014 (all amounts in thousands of dollars):</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 88%; border-collapse: collapse; margin-left: 0.75in">
<tr style="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="10" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Year ended December 31,</font></td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2014</font></td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2013</font></td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2012</font></td>
    <td nowrap style="padding-bottom: 1pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="width: 55%; font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Europe</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 12%; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,901</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 12%; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">7,455</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 12%; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,637</font></td>
    <TD STYLE="width: 1%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Africa</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">24,083</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">903</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">South America</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,479</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">33</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">United States</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">126</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">199</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">217</font></td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Israel</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">50</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">232</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">86</font></td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Other</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">64</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Total</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29,703</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,822</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,940</font></td>
    <td>&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

</DIV>


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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1pt solid; width: 99%">

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following table provides a breakdown
of total revenue by product category for the three years ended December 31, 2014 (all amounts in thousands of dollars):</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 88%; border-collapse: collapse; margin-left: 0.75in">
<tr style="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="10" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Year ended December 31,</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2014</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2013</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <td nowrap colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2012</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="width: 55%; font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Products</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 12%; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">4,982</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 12%; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">5,392</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 12%; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,856</font></td>
    <TD STYLE="width: 1%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Maintenance, royalties and project management</font></td>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">24,721</font></td>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,430</font></td>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid">&nbsp;</td>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">5,084</font></td>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Total</font></td>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29,703</font></td>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</td>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,822</font></td>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</td>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right; font-size: 10pt; text-indent: 0.25in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,940</font></td>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our revenues from projects in Africa increased
in 2014 as a result of new awarded contracts in 2014 and an ongoing contract transferred to us as part of the acquisition of the
SmartID<SUP>TM</SUP> division from OTI.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>


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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1pt solid; width: 99%">

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Competition</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We assess our competitive position from
our experience and market intelligence, including third party competitive research materials. We believe that Zebra, RF Code, Axcess,
Ekahau, Wave Trend, Elpas and AeroScout are our potential competitors with respect to our RFID products and solutions. We believe
that G4S/Guidance, Serco, 3M Monitoring, Buddi, iSecureTrac and SecureAlert are our potential competitors with respect to our EM
products and solutions. We believe that Face Technologies, 3M/Cogent, Zetes Industries, M&uuml;hlbauer Group, Oberthur Technologies,
Safran Morpho, Gemalto, Bundesdruckerei GmbH and Nadra are our potential competitors in the e-ID products and solutions market.
We believe that Apple, Google, M-PESA, Giesecke &amp; Devrient, MagTek, Square and VeriFone are the primary competitors for our
SMP division. Due to the developing nature of the markets for our products and solutions and the ongoing changes in this market,
the above-mentioned list may not constitute a full list of all of our competitors and additional companies may be considered our
competitors.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our management expects competition to intensify
as the markets in which our products and solutions compete continue to develop. Some of our competitors may be more technologically
sophisticated or have substantially greater technical, financial or marketing resources than we do, or may have more extensive
pre-existing relationships with potential customers. Although our products and services combine technologies and features that
provide customers with complete and comprehensive solutions, we cannot assure that other companies will not offer similar products
in the future or develop products and services that are superior to our products and services, achieve greater customer acceptance
or have significantly improved functionality as compared to our products and services. Increased competition may result in our
experiencing reduced margins, loss of sales or a decrease in market share.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Intellectual Property</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our ability to compete is dependent on
our ability to develop and maintain the proprietary aspects of our technology. We rely on a combination of patents, trademarks,
copyrights, trade secrets and other intellectual property laws, as well as employee and third-party nondisclosure agreements, licensing
and other contractual arrangements. However, these legal protections afford only limited protection for our proprietary technology
and intellectual property.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition, the laws of certain foreign
countries may not protect our intellectual property rights to the same extent as do the laws of Israel or the United States. Our
method of protecting our intellectual property rights in Israel, the United States or any other country in which we operate may
not be adequate to fully protect such rights.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Trademarks</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We rely on trade names, trademarks and
service marks to protect our name brands. We hold registered trademarks in several countries including Israel, the United States
and the United Kingdom.  We have registered trademarks
for PureRFid<SUP>&reg;</SUP>, SuperCom<SUP>&reg;</SUP>, Vuance<SUP>&reg;</SUP>, EduGate<SUP>&reg;</SUP>, and &ldquo;Vuance Validate
your World&rdquo;<SUP>&reg; </SUP>and have applied for trademarks for PureMonitor<SUP>TM</SUP>, PureCom<SUP>TM</SUP>, PureTag<SUP>TM</SUP>,
PureTrack<SUP>TM </SUP>AAID<SUP>TM</SUP>, SmartID<SUP>TM</SUP>, MAGNA<SUP>TM</SUP> and PureArrest<SUP>TM</SUP>.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Licenses</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We license technology and software, such
as operating systems and database software, from third parties for incorporation into our systems and products, and we expect to
continue to enter into these types of agreements for future products. Our licenses are either perpetual or for specific terms.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">As part of the sale of our e-ID activities
to OTI in 2006, we received an irrevocable, worldwide, non-exclusive, non-assignable and non-transferable license to use the intellectual
property that we transferred to OTI in connection with certain ongoing e-ID projects. This license was replaced by a full assignment
of the IP following our acquisition of the SmartID<SUP>TM</SUP> division from OTI in December 2013. As part of the acquisition
of the SmartID&trade; division, we also received an irrevocable, worldwide, non-exclusive, non-assignable and non-transferable
license to use certain intellectual property from OTI in connection with our past, ongoing and future e-ID projects.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><B>Corporate Information</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We are a company organized
under the laws of the State of Israel that was originally formed in 1988 under the name</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

</DIV>


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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1pt solid; width: 99%">

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0in">SuperCom Ltd. On May 14,
2007, we changed our name to Vuance Ltd. and, on January 24, 2013, we changed our name back to SuperCom Ltd.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">Our principal executive
office and registered office is located at 1 Arie Shenkar, Herzlia, Israel, 4672501, telephone number +972-9-889-0880. Our agent
in the United States is SuperCom, Inc., a Delaware corporation, and is located at 200 Park Avenue South, New York, New York, telephone
number +1 (212) 675-4606. Our website is located at www.supercom.com. Information accessed through our website is not incorporated
into this prospectus and is not a part of this prospectus supplement.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Summary Financial Data</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following summary consolidated financial
data for and as of the two years ended December 31, 2012, are derived from our audited consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. Our audited consolidated financial statements for the two years ended December
31, 2014, and as of December 31, 2013, and December 31, 2014, are incorporated by reference in this prospectus supplement and the
accompanying prospectus. The summary financial information as of March 31, 2015, and for the three month periods ended March 31,
2015 and March 31, 2014, have been derived from our unaudited financial statements, which include all adjustments consisting of
normal recurring adjustments that we consider necessary for a fair presentation of our financial position of operations for these
periods. Results for interim periods are not necessarily indicative of the results that may be expected for the entire year. You
should read the information presented below together with our consolidated financial statements, the notes to those statements
and the other financial information incorporated by reference in this prospectus supplement and the accompanying prospectus.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Use of Non-GAAP Financial Measures</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following summary consolidated financial
data presents certain non-GAAP measures. We present these non-GAAP measures because we believe these measures are useful
indicators of our operating performance. Our management uses these non-GAAP measures principally as a measure of our operating
performance. We also believe that these measures are useful to our management and investors as a measure of comparative operating
performance from period to period.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We have presented the following non-GAAP
financial measures in this prospectus supplement: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and EBITDA.
The Company defines:</P>

<P STYLE="color: #010000; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: #010000">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">non-GAAP gross profit as gross profit
(GAAP) excluding amortization of software and intellectual property; </FONT></TD></TR></TABLE>

<P STYLE="color: #010000; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: #010000">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">non-GAAP operating income as operating
income (GAAP) excluding amortization of software and intellectual property, amortization of customer contracts, expense for doubtful
debt associated with a 2009 project and stock based compensation expenses; </FONT></TD></TR></TABLE>

<P STYLE="color: #010000; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: #010000">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">non-GAAP net income as net income (GAAP)
excluding amortization of software and intellectual property, amortization of customer contracts, income tax benefit, financial
expenses, expense for doubtful debt associated with a 2009 project and stock based compensation expenses;</FONT></TD></TR></TABLE>

<P STYLE="color: #010000; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: #010000">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">EBITDA as net income (GAAP) excluding
income tax benefit, financial expenses, depreciation and amortization, expense for doubtful debt associated with a 2009 project
and stock based compensation expenses.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

</DIV>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr>
    <TD NOWRAP STYLE="vertical-align: top">&nbsp;</td>
    <TD COLSPAN="3" NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>Three Months Ended</b></font><br>
<font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>March 31,</b></font></td>
    <TD COLSPAN="4" NOWRAP STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>Year Ended</b></font><br>
<font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>December 31,</b></font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="width: 42%">&nbsp;</td>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>2015</b></font></td>
    <TD NOWRAP STYLE="width: 2%; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>2014</b></font></td>
    <TD NOWRAP STYLE="width: 2%; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>2014</b></font></td>
    <TD NOWRAP STYLE="width: 2%; text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="width: 13%; border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>2013</b></font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(all amounts in thousands of dollars)</font></td>
    <TD NOWRAP STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(unaudited)</font></td>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(unaudited)</font></td>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(unaudited)</font></td>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(unaudited)</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</font></td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</font></td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</font></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>TOTAL ASSETS</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">41,876</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">31,265</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">42,874</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">31,279</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>TOTAL CURRENT LIABILITIES</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">9,723</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,325</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">12,666</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,129</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>TOTAL LONG TERM LIABILITIES</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,607</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">4,236</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,902</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,758</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>TOTAL SHAREHOLDERS' EQUITY</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">30,546</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">20,704</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">28,306</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">19,392</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>REVENUES</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">7,700</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">5,308</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">29,703</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,822</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>GROSS PROFIT</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">5,398</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">4,285</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">22,402</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,926</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif"><b>NET INCOME FOR THE PERIOD</b></font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2,062</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,335</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,201</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,466</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">GAAP gross profit</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">5,398</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">4,285</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">22,402</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,926</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Stock Based Compensation Expense</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">37</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Amortization of Software and IP</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">89</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">155</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">354</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">0</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Non-GAAP gross profit</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">5,524</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">4,440</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">22,756</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,926</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">GAAP operating income</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2,604</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,360</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">8,009</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,514</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Amortization of Software and IP</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">89</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">155</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">354</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">0</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Amortization of Customer Contracts</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">230</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">240</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,158</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">0</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Expense for doubtful debt associated with old project from 2009</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,225</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">358</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Stock Based Compensation Expense</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">175</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Non-GAAP operating income</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,098</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,755</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">10,746</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,872</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">GAAP Net income</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2,062</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,335</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,201</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,466</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Amortization of Software and IP</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">89</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">155</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">354</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">0</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Amortization of Customer Contracts</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">230</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">240</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1158</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">0</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Income tax benefit</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">548</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,675</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(5,108)</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Expense for doubtful debt associated with old project from 2009</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,225</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">358</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Stock Based Compensation Expenses</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">175</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right">&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right">&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Non-GAAP net income</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,104</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,730</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">10,613</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,716</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">GAAP Net Income</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">2,062</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,335</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,201</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">6,466</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Income tax benefit</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">548</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,675</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(5,108)</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Financial&nbsp;&nbsp;expenses (income), net</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">(6)</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">25</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">133</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">156</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Depreciation and amortization and stock based compensation expenses</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">510</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">408</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,788</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">80</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 16.2pt; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">Expense for doubtful debt associated with old project from 2009</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">-</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,225</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">358</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><font style="font: 10pt Arial, Helvetica, Sans-Serif">EBITDA</font></td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">3,114</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,768</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">11,022</font></td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font: 10pt Arial, Helvetica, Sans-Serif">1,952</font></td></tr>
</table>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

</DIV>

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<DIV STYLE="padding-right: 5pt; padding-left: 5pt; border: Black 1pt solid; width: 99%">

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_003"></A>THE OFFERING</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 40%; text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">Issuer</font></td>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 58%; text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">SuperCom Ltd.</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">Ordinary shares offered by us</font></td>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">Ordinary shares outstanding immediately after this offering</font></td>
    <TD>&nbsp;</TD>
    <TD><font style="font-family: Arial, Helvetica, Sans-Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the underwriters exercise the over-allotment option in full)</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">Over-allotment option</font></td>
    <TD>&nbsp;</TD>
    <TD><font style="font-family: Arial, Helvetica, Sans-Serif">We have granted the underwriters an option to purchase up to an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional ordinary shares to cover any over-allotments. This option is exercisable, in whole or in part, for a period of 30 days from the date of this prospectus supplement.</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">Use of proceeds</font></td>
    <TD>&nbsp;</TD>
    <TD><font style="font-family: Arial, Helvetica, Sans-Serif">We plan to use the net proceeds of this offering for general corporate purposes and for strategic acquisitions of, or investments in, complementary businesses, technologies or other assets.&nbsp;&nbsp;See &ldquo;Use of Proceeds&rdquo; beginning on page S-29 of this prospectus supplement.</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">Risk factors</font></td>
    <TD>&nbsp;</TD>
    <TD><font style="font-family: Arial, Helvetica, Sans-Serif">You should carefully read and consider the information beginning on page S-13 of this prospectus supplement and page 2 of the accompanying prospectus set forth under the headings &ldquo;Risk Factors&rdquo; before deciding to invest in our ordinary shares.</font></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">NASDAQ Capital Market symbol</font></td>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif">SPCB</font></td></tr>
</table>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">The number of ordinary shares to be outstanding
after this offering is based on 13,840,349 ordinary shares outstanding as of June 12, 2015, and excludes as of that date, 417,432
ordinary shares issuable upon the exercise of currently outstanding options having a weighted average exercise price of $4.09 per
share.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Except as otherwise indicated,
all information in this prospectus supplement assumes no exercise of the underwriters&rsquo; overallotment option to purchase additional
ordinary shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_004"></A>RISK FACTORS</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Investing in our ordinary shares involves
a high degree of risk. You should carefully consider the risks described below along with all of the other information contained
in this prospectus supplement and the accompanying prospectus and the information incorporated herein and therein by reference,
including our financial statements and the related notes, before deciding whether to purchase our ordinary shares. If any of the
adverse events described in the following risk factors, as well as other factors which are beyond our control, actually occurs,
our business, results of operations and financial condition may suffer significantly. As a result, the trading price of our ordinary
shares could decline, and you may lose all or part of your investment in our ordinary shares. Additional risks and uncertainties
not presently known to us, or that we currently see as immaterial, may also harm our business. Please also read carefully the
section below entitled &ldquo;Special Note Regarding Forward-Looking Statements.&rdquo;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>If we are unable to manage our growth profitably, our
business, financial results and stock price could suffer.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our future financial results will depend
in part on our ability to profitably manage our growth. Management will need to maintain existing customers and attract new customers,
recruit, retain and effectively manage employees, as well as expand operations and integrate customer support and financial control
systems. If integration<I>-</I>related expenses and capital expenditure requirements are greater than anticipated or if we are
unable to manage our growth profitably after the acquisition, our financial results and the market price of our ordinary shares
may decline.&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>In the three years ended December 31, 2014, we depended
on orders from large customers for a substantial portion of our revenues. The loss of all or any of these customers or a decrease
in their orders could adversely impact our operating results.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In the year ended December 31, 2014, 91%
of our consolidated net revenue is attributable to sales to four large customers.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In the years ended December 31, 2013, and
2012, 73% and 64%, respectively, of our consolidated net revenue was attributable to sales to one large customer. While we expect
to be less dependent on these customers in 2015 and in the future, a substantial reduction in sales to, or loss of, any of the
four customers would adversely affect our business unless we were able to replace the revenue received from those customers, which
replacement we may not be able to find.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Because competition in our industry is intense, our business,
operating results and financial condition may be adversely affected.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The global markets for our M2M, e-ID and
secure mobile payments, or SMP, solutions are intensely competitive. They are characterized by rapidly changing technology, frequent
new product introductions and rapidly changing customer requirements. We expect competition to increase as the industry grows and
as M2M, e-ID and SMP technology are adapted by governmental and public sectors around the world, we may not be able to compete
successfully against current or future competitors. We face competition from technologically sophisticated companies, many of which
have substantially greater technical, financial, and marketing resources than we do. In some cases, we compete with entities that
have pre-existing relationships with potential customers. As the markets in which our M2M, e-ID and SMP compete expand, we expect
additional competitors to enter the market. We cannot ensure that we will be able to maintain the quality of our products relative
to those of our competitors or continue to develop and market new products effectively. Continued competitive pressures could cause
us to lose significant market share.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Some of our competitors and potential competitors
have larger technical staffs, larger customer bases, more established distribution channels, greater brand recognition and greater
financial, marketing and other resources than we do. Our competitors may be able to develop products and services that (i) are
superior to our products</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">and services, (ii) achieve greater customer acceptance or (iii)
have significantly improved functionality as compared to our existing and future products and services. In addition, our competitors
may be able to negotiate strategic relationships on more favorable terms than we are able to negotiate. Many of our competitors
may also have well-established relationships with our existing and prospective customers. Increased competition may result in our
experiencing reduced margins, loss of sales or decreased market share.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The average selling prices for our products
and solutions may decline as a result of competitive pricing pressures, promotional programs and customers who negotiate price
reductions in exchange for longer-term purchase commitments. The pricing of products and solutions depends on the specific features
and functions of the products, purchase volumes and the level of sales and service support required. As we experience pricing pressure,
the average selling prices and gross margins for our products and solutions may decrease over product lifecycles. These same competitive
pressures may require us to write down the carrying value of any inventory on hand, which could adversely affect our operating
results and earnings per share.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Furthermore, most contracts with governments
or with state or local agencies or municipalities are awarded through a competitive bidding process, and some of the business that
we expect to seek in the future will likely be subject to a competitive bidding process. Competitive bidding presents a number
of risks, including:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the frequent need to compete against companies or teams of companies
with more financial and marketing resources and more experience than we have in bidding on and performing major contracts;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the need to compete against companies or teams of companies that may
be long-term, entrenched incumbents for a particular contract we are competing for and which have, as a result, greater domain
expertise and established customer relations;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the substantial cost and managerial time and effort necessary to prepare
bids and proposals for contracts that may not be awarded to us;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the need to accurately estimate the resources and cost structure that
will be required to service any fixed-price contract that we are awarded; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the expense and delay that may arise if our competitors protest or
challenge new contract awards made to us pursuant to competitive bidding or subsequent contract modifications, and the risk that
any of these protests or challenges could result in the resubmission of bids on modified specifications, or in termination, reduction
or modification of the awarded contract.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We may not be afforded the opportunity
in the future to bid on contracts that are held by other companies and are scheduled to expire, if the governments, or the applicable
state or local agency or municipality determines to extend the existing contract. If we are unable to win particular contracts
that are awarded through the competitive bidding process, we may not be able to operate in the market for the products and services
that are provided under those contracts for a number of years. If we are unable to win new contract awards or retain those contracts,
if any, that we are awarded over any extended period, our business, prospects, financial condition and results of operations will
be adversely affected.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Any acquisitions that we have completed, or may complete
in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In an effort to effectively compete in
the safety, identification, tracking and security products and services business, we have sought to acquire complementary businesses
in the past and will continue to do so in the future. In the event of any future acquisitions, we could:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">issue additional securities that would dilute our current shareholders&rsquo;
percentage ownership;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">incur debt and assume liabilities; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">incur large and immediate write-offs of intangible assets, accounts
receivable or other assets.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">These events could result in significant
expenses and decreased revenue, which could adversely affect the market price of our ordinary shares. In addition, integrating
product and service acquisitions and completing any future acquisitions involve numerous operational and financial risks. These
risks include difficulty in assimilating</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">acquired operations, diversion of management&rsquo;s attention,
and the potential loss of key employees or customers of acquired operations. Furthermore, companies acquired by us may not generate
financial results consistent with our management&rsquo;s plans at the time of acquisition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Although we had profitable operations in the four years
ended December 31, 2014, if we do not generate sufficient cash from operations, we will be required to obtain additional financing
or reduce our level of expenditure. Such financing may not be available in the future, or, if available, may not be on terms favorable
to us.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Disruptions, uncertainty or volatility
in the capital and credit markets may limit our access to capital required to operate our business. Such market conditions may
limit our ability to raise additional capital to support business growth. If we are unable to obtain necessary additional financing
or generate cash from operations, we may be required to reduce the scope of our operations and may need to implement certain operational
changes to decrease our expenses. This would have the potential to decrease both our ability to attain profitability and our financial
flexibility. If adequate funds are not available to us, our business, and results of operations and financial condition will be
adversely affected.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>The market for our products is characterized by changing
technology, requirements, standards and products, and we may be adversely affected if we do not respond promptly and effectively
to these changes.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The market for our products is characterized
by evolving technologies, changing industry standards, changing regulatory environments, frequent new product introductions and
rapid changes in customer requirements. The introduction of products embodying new technologies and the emergence of new industry
standards and practices can render existing products obsolete and unmarketable. Our future success will depend on our ability to
enhance our existing products and to develop and introduce, on a timely and cost-effective basis, new products and product features
that keep pace with technological developments and emerging industry standards and address the increasingly sophisticated needs
of our customers. In the future:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">we may not be successful in developing and marketing new products
or product features that respond to technological change or evolving industry standards;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">we may experience difficulties that could delay or prevent the successful
development, introduction and marketing of these new products and features; or</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">our new products and product features may not adequately meet the
requirements of the marketplace and achieve market acceptance.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">If we are unable to respond promptly and
effectively to changing technologies and market requirements, we will be unable to compete effectively in the future.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">There can be no assurance that we will
successfully identify new product opportunities and develop and bring new products to market in a timely manner, or that the products
and technologies developed by others will not render our products or technologies obsolete or noncompetitive. The failure of our
new product development efforts could have a material adverse effect on our business, results of operations and future growth.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We have sought in the past and will seek in the future
to enter into contracts with governments, as well as state and local governmental agencies and municipalities, which subjects us
to certain risks.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Governmental contracts subject us to several
other risks, including risks associated with public budgetary restrictions and uncertainties, actual contracts that are less than
awarded contract amounts, and cancellation at any time at the option of the governmental agency. Governments may also be in a position
to obtain greater rights with respect to our intellectual property than we would grant to other entities. In addition, governmental
agencies have the power, based on financial difficulties or investigations of their contractors, to deem contractors unsuitable
for new contract awards. Because we engage in the government contracting business, we are subject to audits, and may be subject
to investigation, by governmental entities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Any failure to comply with the terms of
any governmental contracts could result in substantial civil and criminal fines and penalties, as well as suspension from future
contracts for a significant period of time, any of which could adversely affect our business by requiring us to pay significant
fines and penalties or prevent us from earning revenues from governmental contracts during the suspension period. Cancellation
of any one of our major governmental contracts could have a material adverse effect on our financial condition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our dependence on third-party representatives could result
in marketing and distribution delays, which would prevent us from generating sales revenues.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We market and sell some of our products
and solutions using a network of representatives covering the Americas, Europe, Asia and Africa. We establish relationships with
representatives through agreements that provide for the marketing of our systems and products. These agreements generally do not
grant exclusivity to the representative and, as a general matter, are not long-term contracts, do not have commitments for minimum
sales, and could be terminated by the representative. We do not have agreements with all of our representatives. We are currently
engaged in discussions with other potential representatives. Such arrangements may never be finalized and, if finalized, such arrangements
may not increase our revenues or profitability.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our ability to terminate a representative
who is not performing satisfactorily may be limited. Inadequate performance by a representative could adversely affect our ability
to develop markets in the regions for which the representative is responsible and could result in substantially greater expenditures
by us in order to develop such markets. Our operating results are highly dependent upon: (i) our ability to maintain our existing
representative arrangements; (ii) our ability to establish and maintain coverage of major geographic areas and establish access
to customers and markets; and (iii) the ability of our representatives to successfully market our products. A failure to achieve
these objectives could result in lower revenues.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>If our technology and solutions cease to be adopted and
used by government and public and private organizations, we may lose some of our existing customers and our operations will be
negatively affected.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our ability to grow depends significantly
on whether governmental and public and private organizations adopt our technology and solutions as part of their new standards
and whether we are able to leverage our expertise with government products into commercial products. If these organizations do
not adopt our technology, we might not be able to penetrate some of the new markets we are targeting, or we might lose some of
our existing customer base.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In order for us to achieve our growth objectives,
our e-ID, M2M and SMP technology and solutions must be adapted to and adopted in a variety of areas, any or all of which may not
adopt our technology. These areas include, among others:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">national ID and e-Government;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">public safety;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the secure financial sector;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">healthcare and homecare; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">animal and livestock management.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We cannot accurately predict the future
growth rate, if any, or the ultimate size of the e-ID, M2M and SMP markets. The expansion of the market for our products and services
depends on a number of factors such as:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the cost, performance and reliability of our products and services
compared to the products and services of our competitors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">customer perception of the benefits of our products and solutions;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">public perception of the intrusiveness of these solutions and the
manner in which organizations use the information collected;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Symbol; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">public perception of the privacy protection for their personal information;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">customer satisfaction with our products and services; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">marketing efforts and publicity for our products and services.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Even if our products and solutions gain
wide market acceptance, our products and services may not adequately address market requirements and may not gain wide market acceptance.
If our solutions or our products and services do not gain wide market acceptance, our business and our financial results will suffer.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>If we are unable to develop and sustain our position as
a provider of&nbsp;</I>e-ID<I>, M2M and SMP solutions and services and earn high margins from our technology, our business will
not be as profitable as we hope, if at all.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The increasing sophistication of our e-ID,
M2M and SMP based technology places a premium on providing innovative software systems and services to customers, in addition to
manufacturing and supplying products. While we have had some success positioning ourselves as a provider of such services and systems,
we may not continue to be successful with this strategy and we may not be able to capture a significant share of the market for
the sophisticated solutions and services that we believe are likely to produce attractive margins in the future. A significant
portion of the value of our e-ID, RFID and mobile based technology lies in the development of software and applications that will
permit the use of RFID and mobile based technology in selected new markets. In contrast, the margins involved in manufacturing
and selling M2M based technology can be relatively small and may not be sufficient to permit us to earn an attractive return on
our development investments.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Unfavorable global economic conditions may adversely affect
our customers, which may directly impact our business and results of operations.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our operations and performance depend on
our target customers, including those from the governmental sector, having adequate resources to purchase our products. The turmoil
in the credit markets and the global economic downturn that commenced in 2008 and intensified in Europe in subsequent years generally
adversely impacted our target customers. Companies and governmental authorities have reduced or delayed and may continue to reduce
or delay their purchasing activities in response to a lack of credit, economic uncertainty, budget deficits and concern about the
general stability of markets. Recently, several European countries encountered severe economic difficulties which affected the
entire Euro-zone economy. The financial crisis, among other things, resulted in the downgrade of the credit worthiness of several
countries in Europe, which affected our customers&rsquo; ability and budget to perform projects within these territories. If such
economic and market conditions remain uncertain or weaken further, specifically changes that may negatively impact the political
or economic stability and environment of the countries from which we derive most of our consolidated net revenues, our business
and future operations may be materially adversely affected.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our efforts to expand our international operations are
subject to a number of risks, any of which could adversely reduce our future international sales and increase our losses.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Most of our revenues to date are attributable
to sales in jurisdictions other than the United States. For the years ended December 31, 2012, 2013 and 2014, approximately 97.6%,
97.7% and 99%, respectively, of our revenues were derived from sales to markets outside of the United States. Our inability to
obtain or maintain federal or foreign regulatory approvals relating to the import or export of our products on a timely basis could
adversely affect our ability to expand our international business. Additionally, our international operations could be subject
to a number of risks, any of which could adversely affect our future international sales and operating results, including:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">increased collection risks;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">trade restrictions;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">export duties and tariffs;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">uncertain political, regulatory and economic developments;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">inability to protect our intellectual property rights;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Symbol; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">highly aggressive competitors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">currency issues;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">difficulties in staffing, managing and supporting foreign operations;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">longer payment cycles; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">difficulties in collecting accounts receivable.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Negative developments in any of these areas
in one or more countries could result in a reduction in demand for our products, the cancellation or delay of orders already placed,
difficulty in collecting receivables, and a higher cost of doing business, any of which could adversely affect our business, results
of operations or financial condition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition, in many countries the national
security organizations require our employees to obtain clearance before such employees can work on a particular transaction. Failure
to receive, or delays in the receipt of, relevant foreign qualifications could also have a material adverse effect on our ability
to make sales or fulfill our orders on a timely basis. Additionally, as foreign government regulators have become increasingly
stringent, we may be subject to more rigorous regulation by governmental authorities in the future. If we fail to adequately address
any of these regulations, our business will be harmed.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We are exposed to risks in operating in foreign markets,
which may make operating in those markets difficult and thereby force us to curtail our business operations.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In conducting our business in foreign countries,
we are subject to political, economic, legal, operational and other risks that are inherent in operating in other countries. Risks
inherent to operating in other countries range from difficulties in settling transactions in emerging markets to possible nationalization,
expropriation, price controls and other restrictive governmental actions. We also face the risk that exchange controls or similar
restrictions imposed by foreign governmental authorities may restrict our ability to convert local currency received or held by
us in their countries into U.S. dollars or other currencies, or to take those dollars or other currencies out of those countries.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Due to the nature of our business, our financial and operating
results could fluctuate.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our financial and operating results have
fluctuated in the past and could fluctuate in the future from quarter to quarter. As a result of our dependence on a limited number
of customers and our increased reliance on our e-ID and electronic monitoring solutions and products, our revenue has experienced
wide fluctuations. We expect that our revenue will continue to fluctuate in the future as we market and implement solutions through
our M2M and SMP divisions. A portion of our sales is not recurring sales; therefore, quarterly and annual sales levels will likely
fluctuate. Sales in any period may not be indicative of sales in future periods. In addition, our result may fluctuate from year
to year for the following reasons:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">long customer sales cycles;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">reduced demand for our products and services;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">price reductions;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">new competitors, or the introduction of enhanced products or services
from new or existing competitors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">changes in the mix of products and services we or our customers and
representatives sell;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">contract cancellations, delays or amendments by customers;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the lack of government demand for our products and services or the
lack of government funds appropriated to purchasing our products and services;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">unforeseen legal expenses, including litigation costs;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">expenses related to acquisitions;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">other non-recurring financial charges;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the lack of availability, or increased cost, of key components and
subassemblies; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the inability to successfully manufacture in volume, and reduce the
price of, certain of our products.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition, the period between our initial
contact with a potential customer and the purchase of our products and services is often long and subject to delays associated
with the budgeting, approval and competitive evaluation processes that frequently accompany significant capital expenditures, particularly
by governmental agencies. The typical sales cycle for our government customers has, to date, ranged from three to 24 months and
the typical sales cycle for our commercial customers has ranged from one to 12 months. A lengthy sales cycle may have an impact
on the timing of our revenue, which may cause our quarterly operating results to fall below investor expectations. We believe that
a customer&rsquo;s decision to purchase our products and services is discretionary, involves a significant commitment of resources,
and is influenced by customer budgetary cycles. To successfully sell our products and services, we generally must educate our potential
customers regarding their use and benefits, which can require significant time and resources. This significant expenditure of time
and resources may not result in actual sales of our products and services.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our reliance on third party technologies and components
for the development of some of our products may delay product launches, impair our ability to develop and deliver products and
hurt our ability to compete in the market.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Most of our products integrate third-party
technology that we license and components that we purchase or otherwise obtain the right to use, including operating systems, microchips,
security and cryptography technology for card operating systems and dual interface technology. Our ability to purchase and license
new technologies and components from third parties is and will continue to be critical to our ability to offer a complete line
of products that meets customer needs and technological requirements. We may not be able to renew our existing licenses or to purchase
components on favorable terms, if at all. If we lose the rights to a patented technology, we may need to stop selling or may need
to redesign our products that incorporate that technology. We may also lose the potential competitive advantage such technology
gave us. In addition, competitors could obtain licenses for technologies for which we are unable to obtain licenses, and third
parties may develop or enable others to develop a similar solution to security issues, either of which could adversely affect our
results of operations. Also, dependence on the patent protection of third parties may not afford us any control over the protection
of the technologies upon which we rely. If the patent protection of any of these third parties were compromised, our ability to
compete in the market could also be impaired.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Although we generally use standard components
for our systems, some of the key components are available only from limited sources. Even where multiple sources are available,
we typically obtain components from only one vendor to ensure high quality, prompt delivery and low cost. If one of our suppliers
was unable to meet our supply demands and we could not quickly replace the source of supply, it could have a material adverse effect
on our business, operating results and financial condition, for reasons including a delay of receipt of revenues and damage to
our business reputation.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Delays in deliveries from our suppliers, defects in goods
or components supplied by our vendors, or delays in projects that are performed by our subcontractors could cause our revenues
and gross margins to decline.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We rely on a limited number of vendors
and subcontractors for certain components of the products we are supplying and projects we perform. In some cases, we rely on a
single source vendor or subcontractor. Any undetected flaws in components to be supplied by our vendors could lead to unanticipated
costs to repair or replace these parts. If one of our suppliers was unable to meet our supply demands and we could not quickly
replace the source of supply, it could cause a delay of receipt of revenues and damage our business reputation. We depend on subcontractors
to adequately perform a substantial part of our projects. If a subcontractor fails to fulfill its obligations under a certain project,
it could delay our receipt of revenues for such project and damage our business reputation, and therefore could have a material
adverse effect on our business, operating results and financial condition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We may have significant differences between forecasted
demands and actual orders received, which may adversely affect our business.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The lead time for ordering parts and materials
and building many of our products can be many months. As a result, we must order parts and materials and build our products based
on forecasted demand. If demand for our products lags significantly behind our forecasts, we may produce more products than we
can sell, which can result in cash flow problems and write-offs or write-downs of obsolete inventory. If demand for our products
exceeds our forecasts, our business may be harmed as a result of delays to perform contracts.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Breaches of network or information technology security,
natural disasters or terrorist attacks could have an adverse effect on our business.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&#9;&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Cyber-attacks or other breaches of network
or information technology, or IT, security, natural disasters, terrorist acts or acts of war may cause equipment failures or disrupt
our systems and operations. We may be subject to attempts to breach the security of our networks and IT infrastructure through
cyber-attack, malware, computer viruses and other means of unauthorized access. While we maintain insurance coverage for some of
these events, the potential liabilities associated with these events could exceed the insurance coverage we maintain. A failure
to protect the privacy of customer and employee confidential data against breaches of network or IT security could result in damage
to our reputation. To date, we have not been subject to cyber-attacks or other cyber incidents which, individually or in the aggregate,
resulted in a material impact to our operations or financial condition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">For us to further penetrate the marketplace,
the marketplace must be confident that we provide effective security protection for national and other secured identification documents
and cards. Although we have not experienced any act of sabotage or unauthorized access by a third party to our software or technology
to date, if an actual or perceived breach of security occurs in our internal systems or those of our customers, regardless of whether
we caused the breach, it could adversely affect the market&rsquo;s perception of our products and services. This could cause us
to lose customers, resellers, alliance partners or other business partners, thereby causing our revenues to decline. If we or our
customers were to experience a breach of our internal systems, our business could be severely harmed by adversely effecting the
market&rsquo;s perception of our products and services.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Third parties could obtain access to our proprietary information
or could independently develop similar technologies.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Despite the precautions we take, third
parties may copy or obtain and use our technologies, ideas, know-how and other proprietary information without authorization or
may independently develop technologies similar or superior to our technologies. In addition, the confidentiality and non-competition
agreements between us and most of our employees, representatives and clients may not provide meaningful protection of our proprietary
technologies or other intellectual property in the event of unauthorized use or disclosure. If we are not able to successfully
defend our industrial or intellectual property rights, we may lose rights to technologies that we need to develop our business,
which may cause us to lose potential revenues, or we may be required to pay significant license fees for the use of such technologies.
To date, we have relied primarily on a combination of trade secret and copyright laws, as well as nondisclosure and other contractual
restrictions on copying, reverse engineering and distribution to protect our proprietary technology.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our current patents and any patents that
we may register in the future may provide only limited protection for our technology and may not be sufficient to provide competitive
advantages to us. For example, competitors could be successful in challenging any issued patents or, alternatively, could develop
similar or more advantageous technologies on their own or design around our patents. Any inability to protect intellectual property
rights in our technology could enable third parties to compete more effectively with us.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition, the laws of certain foreign
countries may not protect our intellectual property rights to the same extent as do the laws of Israel or the United States. Our
means of protecting our intellectual property rights in Israel, the United States or any other country in which we operate may
not be adequate to fully protect our intellectual property rights.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Third parties may assert that we are infringing their
intellectual property rights, and IP litigation could require us to incur substantial costs even when our efforts are successful.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We may face intellectual property litigation,
which could be costly, harm our reputation, limit our ability to sell our products, force us to modify our products or obtain appropriate
licenses, and divert the attention of management and technical personnel. Our products employ technology that may infringe on the
proprietary rights of others, and, as a result, we could become liable for significant damages and suffer other harm to our business.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Litigation may be necessary in the future
to enforce any patents we have or may obtain and/or any other intellectual property rights, to protect our trade secrets, to determine
the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity, and we may
not prevail in any such future litigation. Litigation, whether or not determined in our favor or settled, could be costly, could
harm our reputation and could divert the efforts and attention of our management and technical personnel from normal business operations.
In addition, adverse determinations in litigation could result in the loss of our proprietary rights, subject us to significant
liabilities, require us to seek licenses from third parties, prevent us from licensing our technology or selling or manufacturing
our products, or require us to expend significant resources to modify our products or attempt to develop non-infringing technology,
any of which could seriously harm our business.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our products may contain technology provided
to us by third parties. Because we did not develop such technology ourselves, we may have little or no ability to determine in
advance whether such technology infringes the intellectual property rights of any other party. Our suppliers and licensors may
not be required to indemnify us in the event that a claim of infringement is asserted against us, or they may be required to indemnify
us only with respect to intellectual property infringement claims in certain jurisdictions, and/or only up to a maximum amount,
above which we would be responsible for any further costs or damages. In addition, we have indemnification obligations to certain
parties with respect to any infringement of third-party patents and intellectual property rights by our products. If litigation
were to be filed against these parties in connection with our technology, we would be required to defend and indemnify such parties.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We rely on the services of certain executive officers
and key personnel, the loss of whom could adversely affect our business.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&#9;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our future success depends largely on the
efforts and abilities of our executive officers and senior management and other key employees, including technical and sales personnel.
The loss of the services of any of these persons could adversely affect our business. We do not maintain any &ldquo;key-person&rdquo;
life insurance with respect to any of our employees.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our ability to remain competitive depends in part on attracting,
hiring and retaining qualified technical personnel, and if we are not successful in such efforts, our business could be disrupted.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Our future success depends in part on the
availability of qualified technical personnel, including personnel trained in software and hardware applications within specialized
fields. As a result, we may not be able to successfully attract or retain skilled technical employees, which may impede our ability
to develop, install, implement and otherwise service our software and hardware systems and to efficiently conduct our operations.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&#9;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The information technology and network
security industries are characterized by a high level of employee mobility and the market for technical personnel remains extremely
competitive in certain regions, including Israel. This competition means that (i) there are fewer highly qualified employees available
for hire, (ii) the costs of hiring and retaining such personnel are high, and (iii) highly qualified employees may not remain with
us once hired. Furthermore, there may be pressure to provide technical employees with stock options and other equity interests
in us, which may dilute our shareholders and increase our expenses.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The additions of new personnel and the
departure of existing personnel, particularly in key positions, can be disruptive, might lead to additional departures of existing
personnel and could have a material adverse effect on our business, operating results and financial condition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>


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<P STYLE="margin: 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Some
of our products are subject to government regulation of radio frequency technology, which could cause a delay in introducing,
or an inability to introduce, such products in the United States and other markets.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
rules and regulations of the United States Federal Communications Commission, or the FCC, limit the radio frequency used by and
level of power emitting from electronic equipment. Our readers, controllers and other radio frequency technology scanning equipment
are required to comply with these FCC rules, which may require certification, verification or registration of the equipment with
the FCC. Certification and verification of new equipment requires testing to ensure the equipment&rsquo;s compliance with the
FCC&rsquo;s rules. The equipment must be labeled according to the FCC&rsquo;s rules to show compliance with these rules. Testing,
processing of the FCC&rsquo;s equipment certificate or FCC registration and labeling may increase development and production costs
and could delay introduction of our verification scanning device and next generation radio frequency technology scanning equipment
into the U.S. market. Selling, leasing or importing non-compliant equipment is considered a violation of FCC rules and federal
law, and violators may be subject to an enforcement action by the FCC. Any failure to comply with the applicable rules and regulations
of the FCC could have an adverse effect on our business, operating results and financial condition by increasing our compliance
costs and/or limiting our sales in the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Risks
Related to Our Ordinary Shares and the Offering </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Volatility
of the market price of our ordinary shares could adversely affect our shareholders and us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
market price of our ordinary shares has been, and is likely to be, highly volatile and could be subject to wide fluctuations in
response to numerous factors, including the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">actual
                                         or anticipated variations in our quarterly operating results or those of our competitors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">announcements
                                         by us or our competitors of technological innovations or new and enhanced products;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">developments
                                         or disputes concerning proprietary rights;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">introduction
                                         and adoption of new industry standards;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">changes
                                         in financial estimates by securities analysts;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">market
                                         conditions or trends in our industry;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">changes
                                         in the market valuations of our competitors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">announcements
                                         by us or our competitors of significant acquisitions;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">entry
                                         into strategic partnerships or joint ventures by us or our competitors;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">additions
                                         or departures of key personnel;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">political
                                         and economic conditions, such as a recession or interest rate or currency rate fluctuations
                                         or political events; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">other
                                         events or factors in any of the countries in which we do business, including those resulting
                                         from war, incidents of terrorism, natural disasters or responses to such events.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, the stock market in general, and the market for Israeli companies in particular, has been highly volatile. Many of these
factors are beyond our control and may materially adversely affect the market price of our ordinary shares, regardless of our
performance. In the past, following periods of market volatility, shareholders have often instituted securities class action litigation
relating to the stock trading and price volatility of the company in question. If we were involved in any securities litigation,
it could result in substantial cost to us to defend and divert resources and the attention of management from our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
have a shareholder that is able to exercise substantial influence over us and all matters submitted to our shareholders.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Sigma
Wave Ltd., or Sigma, which is controlled by family members of Mrs. Tsviya Trabelsi, our Chairman of the Board and by her husband,
Mr. Arie Trabelsi, is the beneficial owner of approximately 29% of our outstanding</FONT></P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">shares. Such ownership interest gives Sigma the ability to
influence and direct our activities, subject to approvals that may be required for related-party transactions pursuant to Israeli
law. Sigma will have influence over the outcome of most matters submitted to our shareholders, including the election of directors
and the adoption of a merger agreement, and such influence could make us a less attractive acquisition or investment target. Because
the interests of Sigma may differ from the interests of our other shareholders, actions taken by Sigma with respect to us may
not be favorable to our other shareholders.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our management team may invest or spend the proceeds
of this offering in ways with which you may not agree or in ways which may not yield a significant return.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">Our management will
have broad discretion over the use of proceeds from this offering. We intend to use the net proceeds of this offering for general
corporate purposes and we may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions
or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions
or investments. However, our management will have broad discretion in the application of the net proceeds from this offering and
could spend the proceeds in ways that do not improve our results of operations or enhance the value of our ordinary shares. The
failure by management to apply these funds effectively could result in financial losses that could have a material adverse effect
on our business and cause the price of our ordinary shares to decline.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>You will experience immediate and substantial dilution.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">The offering price per
share in this offering will exceed the net tangible book value per ordinary share outstanding immediately prior to this offering.
Assuming that an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ordinary shares are sold
at the public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, for aggregate gross proceeds of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and after deducting the underwriting discount and estimated aggregate offering expenses
payable by us, you will experience immediate dilution of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ordinary share, representing
the difference between our pro forma net tangible book value per share as of March 31, 2015, after giving effect to this offering
and the offering price. See the section entitled &ldquo;Dilution&rdquo; on page S-31 below for a more detailed illustration
of the dilution you may incur if you participate in this offering.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>Purchasers in this
offering may experience additional dilution in the book value of their investment in the future.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We are not restricted
from issuing additional securities in the future, including ordinary shares, securities that are convertible into or exchangeable
for, or that represent the right to receive, ordinary shares or substantially similar securities. The issuance of these securities
may cause further dilution to our shareholders. In order to raise additional capital, we may in the future offer such additional
securities at prices that may not be the same as the price per share in this offering. We cannot assure you that we will be able
to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share
paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior
to existing shareholders, including investors who purchase ordinary shares in this offering. The price per share at which we sell
additional ordinary shares or securities convertible into ordinary shares in future transactions may be higher or lower than the
price per share in this offering. The exercise of outstanding options to purchase ordinary shares may also result in further dilution
of your investment.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We do not expect to pay cash dividends.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We have never paid cash dividends on our
ordinary shares and do not anticipate paying cash dividends in the near future. According to the Israeli Companies Law, dividends
may only be paid out of profits legally available for distribution and provided that there is no reasonable concern that such
payment will prevent us from satisfying our existing and foreseeable obligations as they become due. The payment of dividends
will depend on earnings, financial condition, debt covenants in place, and other business and economic factors affecting us at
such time as our board of directors may consider relevant. If we do not pay dividends, our ordinary shares may be less valuable
because a return on your investment will only occur if our stock price appreciates.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We may fail to maintain effective internal control over
financial reporting, which could result in material misstatements in our financial statements.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley,
imposes certain duties on us and our executives and directors. Our efforts to comply with the requirements of Section 404 of Sarbanes-Oxley
governing internal controls and procedures for financial reporting have resulted in increased general and administrative expense
and a diversion of management time and attention, and we expect these efforts to require the continued commitment of significant
resources. Section&nbsp;404 of Sarbanes-Oxley requires management&rsquo;s annual review and evaluation of our internal control
over financial reporting in connection with the filing of the annual report on Form 20-F for each fiscal year. We may identify
material weaknesses or significant deficiencies in our internal control over financial reporting. Failure to maintain effective
internal control over financial reporting could result in material misstatements in our financial statements. Any such failure
could also adversely affect the results of our management&rsquo;s evaluations and annual auditor reports regarding the effectiveness
of our internal control over financial reporting. Failure to maintain effective internal control over financial reporting could
result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our operating results,
investor confidence in our reported financial information and the market price of our ordinary shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>While we believe that we are not currently a PFIC and
do not anticipate becoming a PFIC, United States tax authorities could treat us as a &ldquo;passive foreign investment company,&rdquo;
which could have adverse United States federal income tax consequences to United States holders.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Generally, if for any taxable year, 75%
or more of our gross income is passive income, or at least 50% of the value of our assets, averaged quarterly, are held for the
production of, or produce, passive income, we will be characterized as a passive foreign investment company, or a PFIC, for U.S.
federal income tax purposes. Determination that we are a PFIC could cause our U.S. shareholders to suffer adverse tax consequences,
including having gains realized on the sale of our shares taxed at ordinary income rates, rather than capital gains rates, and
being subject to an interest charge on such gain. Similar rules apply to certain &ldquo;excess distributions&rdquo; made with
respect to our ordinary shares. A determination that we are a PFIC could also have an adverse effect on the price and marketability
of our shares. If we are a PFIC for U.S. federal income tax purposes, highly complex rules would apply to U.S. holders owning
our ordinary shares. Accordingly, you are urged to consult your tax advisors regarding the application of such rules.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Risks Related to Our Location and Incorporation in Israel</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Political, economic and military instability in Israel
may disrupt our operations and negatively affect our business condition, harm our results of operations and adversely affect our
share price.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We are incorporated under the laws of,
and our principal executive offices and research and development facilities are located in, the State of Israel. As a result,
political, economic and military conditions affecting Israel directly influence us. Any major hostilities involving Israel, a
full or partial mobilization of the reserve forces of the Israeli army, the interruption or curtailment of trade between Israel
and its present trading partners, or a significant downturn in the economic or financial condition of Israel could adversely affect
our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Since its establishment in 1948, Israel
has been involved in a number of armed conflicts with its Arab neighbors and a state of hostility, varying from time to time in
intensity and degree, has continued into 2015. Also, since 2011, riots and uprisings in several countries in the Middle East and
neighboring regions have led to severe political instability in several neighboring states and to a decline in the regional security
situation. Such instability may affect the local and global economy, could negatively affect business conditions and, therefore,
could adversely affect our operations. In addition, Iran has threatened to attack Israel and is widely believed to be developing
nuclear weapons. Iran is also believed to have a strong influence among extremist groups in areas that neighbor Israel, such as
Hamas in Gaza and Hezbollah in Lebanon. To date, these matters have not had any material effect on our business and results of
operations; however, the regional security situation and worldwide</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">perceptions of it are outside our control and there can be
no assurance that these matters will not negatively affect us in the future.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Furthermore, we could be adversely affected
by the interruption or reduction of trade between Israel and its trading partners. Some countries, companies and organizations
continue to participate in a boycott of Israeli companies and others doing business with Israel or with Israeli companies. As
a result, we are precluded from marketing our products to these countries, companies and organizations. Foreign government defense
export policies towards Israel could also make it more difficult for us to obtain the export authorizations necessary for our
activities. Also, over the past several years, there have been calls, in Europe and elsewhere, to reduce trade with Israel. Restrictive
laws, policies or practices directed towards Israel or Israeli businesses may have an adverse impact on our operations, our financial
results or the expansion of our business.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our financial results may be adversely affected by inflation
and currency fluctuations.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We report our financial results in dollars,
while a portion of our expenses, primarily salaries, are paid in NIS. Therefore, our NIS related costs, as expressed in U.S. dollars,
are influenced by the exchange rate between the U.S. dollar and the NIS. The appreciation of the NIS against the U.S. dollar will
result in an increase in the U.S. dollar cost of our NIS expenses. We are also influenced by the timing of, and the extent to
which, any increase in the rate of inflation in Israel over the rate of inflation in the United States is not offset by the devaluation
of the NIS in relation to the dollar. Our dollar costs in Israel will increase if inflation in Israel exceeds the devaluation
of the NIS against the dollar or if the timing of such devaluation lags behind inflation in Israel. In the past, the NIS exchange
rate with the dollar and other foreign currencies had fluctuated, generally reflecting inflation rate differentials. We cannot
predict any future trends in the rate of inflation in Israel or the rate of devaluation or appreciation of the NIS against the
dollar. If the dollar cost of our operations in Israel increases, our dollar measured results of operations will be adversely
affected.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Our operations could be disrupted as a result of the
obligation of management or key personnel to perform military service in Israel.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Generally, all nonexempt male adult citizens
and permanent residents of Israel under the age of 40, or older for reserves officers or citizens with certain occupations, as
well as certain female adult citizens and permanent residents of Israel, are obligated to perform annual military reserve duty
and are subject to being called for active duty at any time under emergency circumstances. While we have operated effectively
under these requirements since our incorporation, we cannot predict the full impact of such conditions on us in the future, particularly
if emergency circumstances occur. If many of our employees are called for active duty, our operations in Israel and our business,
operating results and financial condition may be adversely affected.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We may not be able to enforce covenants not-to-compete
under current Israeli law.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We have non-competition agreements with
most of our employees, many of which are governed by Israeli law. These agreements generally prohibit our employees from competing
with us or working for our competitors for a specified period following termination of their employment. However, Israeli courts
are reluctant to enforce non-compete undertakings of former employees and tend, if at all, to enforce those provisions for relatively
brief periods of time in restricted geographical areas and only when the employee has unique value specific to that employer&rsquo;s
business and not just regarding the professional development of the employee. Any such inability to enforce non-compete covenants
may cause us to lose any competitive advantage resulting from advantages provided to us by such confidential information.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>We may become subject to claims for remuneration or royalties
for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">A significant portion of our intellectual
property has been developed by our Israeli employees in the course of their employment for us. Under the Israeli Patent Law, 5727-1967
(the &ldquo;Israeli Patent Law&rdquo;), inventions conceived by an employee during the term and as part of the scope of his or
her employment with a company are regarded</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">as &quot;service inventions,&quot; which belong to the employer,
absent a specific agreement between the employee and employer giving the employee service invention rights. The Israeli Patent
Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties
Committee (the &ldquo;C&amp;R Committee&rdquo;), a body constituted under the Israeli Patent Law, shall determine whether the
employee is entitled to remuneration for his inventions. The C&amp;R Committee (decisions of which have been upheld by the Israeli
Supreme Court) has held that employees may be entitled to remuneration for their service inventions despite having specifically
waived any such rights. Further, the C&amp;R Committee has not yet set specific guidelines regarding the method for calculating
this remuneration or the criteria or circumstances under which an employee&rsquo;s waiver of his right to remuneration will be
disregarded. We generally enter into intellectual property assignment agreements with our employees pursuant to which such employees
assign to us all rights to any inventions created in the scope of their employment or engagement with us. Although our employees
have agreed to assign to us service invention rights and have specifically waived their right to receive any special remuneration
for such assignment beyond their regular salary and benefits, we may face claims demanding remuneration in consideration for assigned
inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or
former employees, or be forced to litigate such claims, which could negatively affect our business.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Your rights and responsibilities as a shareholder will
be governed by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We are incorporated under Israeli law.
The rights and responsibilities of holders of our ordinary shares are governed by our Memorandum of Association and Articles of
Association and by Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities
of shareholders in typical U.S. corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith
and customary manner in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders,
and to refrain from misusing his power, including, among other things, when voting at the general meeting of shareholders on certain
matters. Israeli law provides that these duties are applicable to shareholder votes on, among other things, amendments to a company&rsquo;s
articles of association, increases in a company&rsquo;s authorized share capital and mergers and interested party transactions
requiring shareholder approval. A shareholder also has a general duty to refrain from exploiting any other shareholder of his
or her rights as a shareholder. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it
possesses the power to determine the outcome of a shareholder vote or who, under our Articles of Association, has the power to
appoint or prevent the appointment of a director or executive officer in the company, has a duty of fairness toward the company.
Israeli law does not define the substance of this duty of fairness, but provides that remedies generally available upon a breach
of contract will apply also in the event of a breach of the duty to act with fairness. Because Israeli corporate law has undergone
extensive revision in recent years, there is little case law available to assist in understanding the implications of these provisions
that govern shareholder behavior.<B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Provisions of Israeli law may delay, prevent or otherwise
encumber a merger with or an acquisition of our company, which could prevent a change of control, even when the terms of such
transaction are favorable to us and our shareholders.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Israeli corporate law regulates mergers,
requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving
directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions.
Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to some of our shareholders whose
country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. These provisions of
Israeli law could delay, prevent or impede a merger with or an acquisition of our company, which could prevent a change of control,
even when the terms of such transaction are favorable to us and our shareholders and therefore potentially depress the price of
our shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B><I></I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B><I>Our
shareholders may face difficulties in the enforcement of civil liabilities against us and our officers and directors and auditors
or in asserting U.S. securities law claims in Israel.</I></B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Most
of our officers and directors and our auditors are residents of Israel or otherwise reside outside of the United States. SuperCom
Ltd. is incorporated under Israeli law and its principal office and facilities are located in Israel. All or a substantial portion
of the assets of such persons are or may be located outside of the United States. Therefore, service of process upon SuperCom
Ltd., such directors and officers and our auditors may be difficult to effect in the United States. It also may be difficult to
enforce a U.S. judgment against SuperCom Ltd., such officers and directors and our auditors as any judgment obtained in the United
States against such parties may not be collectible in the United States. In addition, it may be difficult to assert U.S. securities
law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities
laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear
a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable,
the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters
of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing these matters.</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Being a foreign private issuer exempts us from certain
Securities and Exchange Commission requirements.</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">As a foreign private issuer within the
meaning of rules promulgated under the U.S. Securities and Exchange Act of 1934, as amended, or the Exchange Act, we are exempt
from certain provisions applicable to U.S. public companies including:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         rules under the Exchange Act requiring the filing with the Securities and Exchange Commission
                                         of quarterly reports on Form 10-Q and current reports on Form 8-K;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         sections of the Exchange Act regulating the solicitation of proxies in connection with
                                         shareholder meetings;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         provisions of Regulation FD aimed at preventing issuers from making selective disclosures
                                         of material information; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         sections of the Exchange Act requiring insiders to file public reports of their stock
                                         ownership and trading activities and establishing insider liability for profits realized
                                         from any &ldquo;short-swing&rdquo; trading transaction (i.e., a purchase and sale, or
                                         sale and purchase, of the issuer&rsquo;s equity securities within less than six months).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Because of these exemptions, investors
are not afforded the same protections or information generally available to investors holding shares in public companies organized
in the United States</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT>&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_005"></A>SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: windowtext">This
prospectus supplement contains various &quot;forward-looking statements&quot; within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act and the Private Securities
Litigation Reform Act of 1995, as amended with respect to our business, financial condition and results of operations. Such
forward-looking statements reflect our current view with respect to future events and financial results. Statements which use
the terms &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;expect,&rdquo; &ldquo;plan,&rdquo; &ldquo;intend,&rdquo;
&ldquo;estimate&rdquo; and similar expressions are intended to identify forward looking statements. We remind readers that
forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and
involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or
industry results, to be materially different from any future results, performance, levels of activity, or our achievements
expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Except as required by applicable law, including the
securities laws of the United States, we undertake no obligation to publicly release any update or revision to any forward
looking statements to reflect new information, future events or circumstances, or otherwise after the date hereof. </FONT>We
have attempted to identify significant uncertainties and other factors affecting forward-looking statements in the
&ldquo;Risk Factors&rdquo; section of this prospectus supplement. You should review carefully the section
entitled &ldquo;Risk Factors&rdquo; beginning on page S-13 of this prospectus supplement and page 2 of the accompanying
prospectus for a discussion of these and other risks that relate to our business and investing in our securities. The
forward-looking statements contained or incorporated by reference in this prospectus supplement are expressly qualified in
their entirety by this cautionary statement.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_006"></A>USE OF PROCEEDS</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We estimate that the
net proceeds from the sale of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary shares in this offering will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million, or approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#9;million
if the underwriters exercise in full their over-allotment option to purchase additional ordinary shares, based on the public offering
price of &nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ordinary share, after deducting the underwriting discount and estimated
offering expenses payable by us.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We intend to use the
net proceeds from this offering for general corporate purposes, including working capital. We may also use a portion of the net
proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although
we have no present commitments or agreements to enter into any acquisitions or investments.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">Investors are cautioned,
however, that expenditures may vary substantially from these uses. Investors will be relying on the judgment of our management,
who will have broad discretion regarding the application of the proceeds of this offering. The amounts and timing of our actual
expenditures will depend upon numerous factors, including the amount of cash generated by our operations, the amount of competition
we face and other operational factors. We may find it necessary or advisable to use portions of the proceeds from this offering
for other purposes.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">From time to time, we
evaluate these and other factors and we anticipate continuing to make such evaluations to determine if the existing allocation
of resources, including the proceeds of this offering, is being optimized. Circumstances that may give rise to a change in the
use of proceeds include:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">a
                                         change in development plan or strategy; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         addition of new products or services; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         availability and terms of debt financing to fund a portion of the purchase price(s) for
                                         potential acquisition; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         need or desire on our part to accelerate, increase or eliminate existing initiatives
                                         due to, among other things, changing market; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">conditions
                                         and competitive developments; </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">failure
                                         to achieve sales as anticipated; and </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">the
                                         availability of other sources of cash including cash flow from operations and alternative
                                         financing arrangements, if any. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">Until we use the net
proceeds of this offering, we will invest the funds in short-term, investment grade, interest-bearing securities.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_007"></A>PRICE RANGE OF OUR
ORDINARY SHARES</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">Our ordinary
shares began trading on The NASDAQ Capital Market effective at the opening of trading on Tuesday, September 17, 2013 under the
ticker symbol &ldquo;SPCB.&rdquo; Prior to September 17, 2013, our ordinary shares traded on OTCQB&reg;&nbsp;electronic quotation
service for securities traded over-the-counter.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">All of the share
price information provided below has been adjusted to give effect to a 1 share for 4.250002 shares reverse stock split effected
on August 23, 2013.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">The following
table sets forth, for the periods indicated, the high and low closing prices of our ordinary shares on the NASDAQ Capital Market
or the OTCQB Market, as applicable.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Annual</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>High</B></FONT></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Low</B></FONT></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left">2010</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">$</TD><TD STYLE="width: 3%; text-align: right">1.23</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">$</TD><TD STYLE="width: 3%; text-align: right">0.21</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">0.59</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">0.17</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">0.85</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">0.04</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">5.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">0.30</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">13.78</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">4.85</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Quarterly </I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><U>2013</U></B></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left">First Quarter</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">$</TD><TD STYLE="width: 3%; text-align: right">1.87</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">$</TD><TD STYLE="width: 3%; text-align: right">0.30</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">2.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">1.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">5.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">2.25</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Fourth Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">4.78</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">3.87</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><U>2014</U></B></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">6.84</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">4.85</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">10.27</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">6.37</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">13.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">8.35</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Fourth Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">13.78</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">9.37</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><U>2015</U></B></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">10.21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">7.54</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Most Recent Six Months</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Month</B></FONT></TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>High</B></FONT></TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Low</B></FONT></TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%">December 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">$</TD><TD STYLE="width: 3%; text-align: right">12.55</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right">$</TD><TD STYLE="width: 3%; text-align: right">9.59</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>January 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">10.21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">7.54</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>February 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">8.82</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">7.89</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>March 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">9.42</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">7.70</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>April 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">12.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">8.44</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>May 2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">13.03</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">10.81</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>June 2015 (through June 16)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">$</TD><TD STYLE="text-align: right">13.82</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">12.09</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">On June 16, 2015, the
last reported sale price of our ordinary shares on The NASDAQ Capital Market was $13.82 per share. As of June 12, 2015, there
were approximately 22 holders of record of our ordinary shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>
<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_008"></A>DIVIDEND POLICY</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We have never paid cash
dividends on our ordinary shares and do not anticipate paying any cash dividends in the foreseeable future, but intend to retain
our capital resources for reinvestment in our business.</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_009"></A>DILUTION</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">If you invest in our
ordinary shares, your interest will be diluted to the extent of the difference between the price per share you pay in this offering
and the net tangible book value per ordinary share immediately after this offering. The net tangible book value of our ordinary
shares as of March 31, 2015, was approximately $26,824,000, or approximately $1.95 per ordinary share based on 13,742,586 shares
outstanding at that time. &ldquo;Net tangible book value&rdquo; is total assets minus the sum of liabilities and intangible assets.
&ldquo;Net tangible book value per share&rdquo; is net tangible book value divided by the total number of shares outstanding.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">After giving effect
to the sale of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares in this offering at the
public offering price of $&#9;per ordinary share, and after deducting the underwriting discount and estimated offering expenses
payable by us, our net tangible book value as of March 31, 2015, would have been approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
or approximately $ &nbsp;&nbsp;&nbsp;&nbsp;per ordinary share based on ordinary shares outstanding on a pro forma basis at that time. This represents
an immediate increase in net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per ordinary share to our existing
shareholders and an immediate dilution of approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to new investors
participating in this offering, as illustrated by the following table:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Public
    offering price per ordinary share </FONT></TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.5in"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Net
    tangible book value per ordinary share of as of March 31, 2015</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$1.95</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.5in"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Increase
    in net tangible book value per ordinary share attributable to the offering</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Pro
    forma net tangible book value per ordinary share as of March 31, 2015, after giving effect to the offering</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Dilution
    in net tangible book value per ordinary share to new investors in the offering</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">$</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">If the underwriters
exercise in full their option to purchase &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional ordinary
shares at the public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, our as adjusted
net tangible book value after this offering would be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million,
or $&nbsp;&nbsp;&nbsp;&nbsp; per ordinary share, representing an increase in net tangible book value of approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to existing shareholders and immediate dilution in net tangible book value of approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to investors
purchasing our ordinary shares in this offering at the public offering price.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">The discussion of dilution,
and the table quantifying it, assume no exercise of any outstanding options or warrants or other potentially dilutive securities.
The exercise of potentially dilutive securities having an exercise price less than the offering price would increase the dilutive
effect to new investors.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In particular, the table above excludes
the following potentially dilutive securities as of  June 12, 2015, 417,432 ordinary shares issuable upon the exercise of
currently outstanding options having a weighted average exercise price of $4.09 per share.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">To the extent that any of these options
or warrants are exercised, new options are issued under our equity incentive plans and subsequently exercised or we issue additional
ordinary shares in the future, there will be further dilution to new investors participating in this offering.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><A NAME="a_0015" TITLE="Material Tax"></A><B>MATERIAL
TAX CONSIDERATIONS</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following description is not intended
to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our ordinary
shares. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax
consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Israeli Tax Considerations and Government Programs</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following is a summary of the current
material Israeli tax laws applicable to companies in Israel with special reference to its effect on us. This summary does not
discuss all the acts of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment
circumstances or to some types of investors subject to special treatment under Israeli law. Some parts of this discussion are
based on new tax legislation that has not been subject to judicial or administrative interpretation. Accordingly, we cannot assure
you that the views expressed in the discussion will be accepted by the tax authorities in question. The discussion is not intended
and should not be construed as legal or professional tax advice and does not cover all possible tax considerations.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><B>POTENTIAL INVESTORS AND HOLDERS OF
OUR SHARES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF OUR ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following discussion describes the
material Israeli tax consequences regarding ownership and disposition of our ordinary shares applicable to non-Israeli shareholders,
including U.S. shareholders.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>General Corporate Tax Structure</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Israeli companies are generally subject
corporate tax on their taxable income at the rate of 25% for the 2012 and 2013 tax years. Following an amendment to the Israeli
Income Tax Ordinance, 1961 (the &ldquo;Tax Ordinance&rdquo;), which came into effect on January 1, 2012, the corporate tax rate
is scheduled to remain at the rate of 25% for future tax years.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">On December 6, 2011, the Law for the Change
in the Tax Burden (Legislative Amendments) &ndash; 2011 was publicized. As part of the law, among other things, the Economic Efficiency
Law (Legislative Amendments for the Implementation of the Economic Plan for 2009 and 2010) &ndash; 2009 and the Income Tax Ordinance
(New Version) &ndash; 1961 were amended whereby, commencing in 2012, the blueprint for the reduction in the corporate tax rates
will be cancelled and the corporate tax rate will be 25%. On July 30, 2013, the Israeli Parliament (the Knesset) passed a law
which was designated to increase the tax levy in the years 2013 and 2014. Among other things, the law increases the Israeli corporate
tax rate from 25% to 26.5% for the year 2014.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Taxation of Capital Gains Applicable to Israeli Shareholders
and Non-Israeli Shareholders</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Israeli law generally imposes a capital
gains tax on the sale of any capital assets by residents of Israel, as defined for Israeli tax purposes, and on the sale of assets
located in Israel, including shares in Israeli companies, by both residents and non-residents of Israel, unless a specific exemption
is available or unless a tax treaty between Israel and the shareholder&rsquo;s country of residence provides otherwise. The law
distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain which
is equivalent to the increase of the relevant asset&rsquo;s purchase price which is attributable to the increase in the Israeli
consumer price index or, in certain circumstances, a foreign currency exchange rate, between the date of purchase and the date
of sale. The real gain is the excess of the total capital gain over the inflationary surplus.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Israeli residents</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Individuals</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Commencing in January 1, 2012, a real
capital gain deriving to an individual will be taxed at a rate of 25%, on condition that the income is not classified as business
income from the vantage point of the individual. This will apply to the entire real capital gain accrued since the date of purchase,
or since January 1, 2003 if the purchase preceded that date.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Notwithstanding the above, the real capital
gain will be taxed at a rate of 30% in the following instances:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">The
                                         individual deducts interest expenses and linkage differentials. The seller is a &ldquo;significant
                                         shareholder&rdquo; at the date of the sale of the securities or at any time during the
                                         12-month period preceding the sale.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">A
                                         &ldquo;significant shareholder&rdquo; is defined in general as shareholder who holds,
                                         either directly or indirectly, alone or together with another, at least 10% of any form
                                         of a means of control in a company. The term &ldquo;together with another&rdquo; means
                                         together with a relative, or together with someone who is not a relative with which the
                                         individual, either directly or indirectly, has a regular cooperative agreement regarding
                                         the affairs of the company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Companies</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The real capital gain on the sale of securities
by a company will be taxed at the corporate tax rate applicable during the year of sale (25% for the 2012 tax year onwards).</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Non-Israeli Residents</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In general, Non-residents of Israel will
be exempt from capital gain tax in relation to the sale of ordinary shares traded on a recognized stock exchange as long as (a)
the capital gain is not in his permanent establishment in Israel, (b) the ordinary shares in relation to which the capital gains
are derived were acquired by the nonresident after the initial listing of the ordinary shares and (c) neither the shareholder
nor the capital gain is subject to certain sections of the Israeli income tax ordinance.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">However, non-Israeli corporations will
not be entitled to such exemption if Israeli residents (i) have a controlling interest of 25% or more in such non-Israeli corporation,
or (ii) are the beneficiaries or are entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whether
directly or indirectly.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition, pursuant to the Income Tax
Treaty between Israel and the U.S. (the &ldquo;Tax Treaty&rdquo;), gains derived from the sale, exchange or disposition of our
ordinary shares by a person who qualifies as a resident of the U.S. within the meaning of the Tax Treaty and who is entitled to
claim the benefits afforded to US residents under the Tax Treaty, referred to as a Treaty US Resident, would not be subject to
Israeli capital gains tax, unless such US Resident owned, directly or indirectly, shares representing 10% or more of the voting
power of our company at any time during the 12-month period preceding such sale, exchange or disposition.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In some instances where our shareholders
may be liable to Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding
of Israeli tax at the source. However, under the Tax Treaty, such U.S. resident would be permitted to claim a credit for such
taxes against the U.S. federal income tax imposed with respect to such sale, exchange or disposition, subject to the limitations
in U.S. laws applicable to foreign tax credits. The Tax Treaty does not relate to U.S. state or local taxes.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B>&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Tax on Dividends</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Non-residents of Israel are subject to
income tax on income accrued or derived from sources in Israel. These sources of income include passive income such as dividends.
On distributions of dividends other than bonus shares, or stock dividends, income tax is applicable at the rate of 25%, or 30%
for a shareholder that is considered a significant shareholder at any time during the 12-month period preceding such distribution.
A different rate may be provided in a treaty between Israel and the shareholder&rsquo;s country of residence. Under the Tax Treaty,
the maximum tax on dividends paid to a holder of our ordinary shares who is a US resident is 25%; however if not more than 25%
of our gross income consists of interest or dividends, then the maximum tax is 12.5% for a shareholder who is a US corporation
holding at least 10% of our issued voting power during the part of the taxable year preceding the date of payment of the dividend
and during the whole of the prior taxable year (and additional conditions under the Tax Treaty are met).</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>U.S. Federal Income Taxation</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The following is a description of certain
U.S. federal income tax consequences relating to the acquisition, ownership and disposition of our ordinary shares by a U.S. Holder
as defined below. This description addresses only the U.S. federal income tax consequences to U.S. Holders that hold our ordinary
shares as capital assets. This description is based on the Internal Revenue Code of 1986, as amended (the &ldquo;Code&rdquo;),
existing, proposed and temporary Treasury regulations promulgated thereunder, judicial and administrative interpretations thereof,
and the United States-Israel Tax Treaty, all as in effect on the date hereof and all of which are subject to change either prospectively
or retroactively. There can be no assurances that the U.S. Internal Revenue Service, (&ldquo;IRS&rdquo;), will not take a different
position concerning the tax consequences of the acquisition, ownership and disposition of our shares or that such a position would
not be sustained. U.S. Holders should consult their own tax advisors concerning the U.S. federal, state, local and foreign tax
consequences of purchasing, owning and disposing of our ordinary shares in their particular circumstances.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">This description does not address all
the tax consequences that may be relevant to a U.S. Holder subject to special tax rules, including without limitation:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">banks,
                                         financial institutions or insurance companies;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">real
                                         estate investment trusts, regulated investment companies or grantor trusts;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">dealers
                                         or traders in securities, commodities or currencies</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">tax-exempt
                                         entities or organizations, including an &ldquo;individual retirement account&rdquo; or
                                         &ldquo;Roth IRA&rdquo; as defined in Section 408 or 408A of the Code</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">certain
                                         former citizens or long-term residents of the United States</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">persons
                                         that received our shares as compensation for the performance of services</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">persons
                                         that will hold our shares as part of a &ldquo;hedging,&rdquo; &ldquo;integrated&rdquo;
                                         or &ldquo;conversion&rdquo; transaction or as a position in a &ldquo;straddle&rdquo;
                                         for U.S. federal income tax purposes</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">partnerships
                                         or other pass-through, or holders that will hold our shares through such an entity</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">S
                                         corporations;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">holders
                                         whose functional currency is not the U.S. dollar; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">holders
                                         that actually or constructively own 10 percent or more of our voting shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Moreover, this description does not address
the United States federal estate, gift or alternative minimum tax consequences, or any state, local or foreign tax consequences,
of the acquisition, ownership and disposition of our ordinary shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">For purposes of this summary, the term
&ldquo;U.S. Holder&rdquo; means any beneficial owner of our ordinary shares who is:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">an
                                         individual and either a citizen or, for U.S. federal income tax purposes, a resident
                                         of the United States;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">a
                                         corporation (or other entity treated as a corporation for U.S. federal income tax purposes)
                                         created or organized in or under the laws of the United States or any political subdivision
                                         thereof;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">an
                                         estate whose income is subject to U.S. federal income tax regardless of its source; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; padding-bottom: 5pt"></TD><TD STYLE="width: 0.25in; padding-bottom: 5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-bottom: 5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">a
                                         trust that (a) is subject to the primary supervision of a court within the United States
                                         and the control of one or more U.S. persons or (b) has a valid election in effect under
                                         applicable U.S. Treasury regulations to be treated as a U.S. person. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">If a partnership (or an entity treated
as a partnership for U.S. federal income tax purposes) holds our ordinary shares, the U.S. federal income tax treatment of a partner
in such a partnership will generally depend upon the status of the partner and the activities of the partnership. Such partner
or partnership should consult their tax advisor about the U.S. federal income tax consequences of holding and disposing of ordinary
shares in its particular circumstance.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Taxation of Dividends</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Subject to the discussion below under
the heading &ldquo;Passive Foreign Investment Companies,&rdquo; the gross amount of any distribution made to you with respect
to our ordinary shares, including the amount of any Israeli taxes withheld therefrom, will constitute dividend income for U.S.
federal income tax purposes, to the extent such dividend is paid out of our current and accumulated earnings and profits as determined
under U.S. federal income tax principles. Distributions in excess of our current and accumulated earnings and profits will be
treated as a non-taxable return of capital to the extent of your tax basis in the ordinary shares, and any amount in excess of
your tax basis will generally be treated as capital gain from the sale of ordinary shares. See &ldquo;Disposition of Ordinary
Shares&rdquo; below for a discussion of the taxation of capital gains. Because we are not a U.S. corporation, U.S. Holders that
are corporations will not be entitled to claim a dividends-received deduction under Section 243 of the Code with respect to distributions
they receive from us.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Dividends that we pay in NIS, including
the amount of any Israeli taxes withheld therefrom, will be included in your income in a U.S. dollar amount calculated by reference
to the exchange rate in effect on the day such dividends are received. A U.S. Holder who receives payment in NIS and converts
NIS into U.S. dollars at an exchange rate other than the rate in effect on such day may have a foreign currency exchange gain
or loss that would be treated as ordinary income or loss. U.S. Holders should consult their own tax advisors concerning the U.S.
tax consequences of acquiring, holding and disposing of NIS.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Subject to complex limitations, any Israeli
withholding tax imposed on such dividends will be a foreign income tax eligible for credit against a U.S. Holder&rsquo;s U.S.
federal income tax liability. The limitations set out in the Code include computational rules under which foreign tax credits
allowable with respect to specific classes of income cannot exceed the U.S. federal income taxes otherwise payable with respect
to each such class of income. Dividends generally will be treated as foreign source passive category income for United States
foreign tax credit purposes. Further, there are special rules for computing the foreign tax credit limitation of a U.S. Holder
who receives dividends subject to a reduced tax rate.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In lieu of claiming a foreign tax credit,
U.S. Holders may, at their election, deduct foreign taxes, including Israeli taxes, in computing their taxable income, subject
to applicable limitations. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign
taxes paid or accrued in the taxable year.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The rules relating to the determination
of the foreign tax credit are complex, and you should consult with your personal tax advisors to determine whether and to what
extent you would be entitled to this credit.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Subject to certain limitations, including
the Medicare tax, discussed below, &ldquo;qualified dividend income&rdquo; received by a non-corporate U.S. Holder will be subject
to tax at a preferential maximum tax rate of 20 percent. Distributions taxable as dividends paid on the ordinary shares should
qualify for the preferential 20 percent rate provided that either: (i) we are entitled to benefits under the income tax treaty
between the United States and Israel (the &ldquo;Treaty&rdquo;) or (ii) the ordinary shares are readily tradable on an established
securities market in the</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">United States and certain other requirements are met. We believe
that we are entitled to benefits under the Treaty and that the ordinary shares currently are readily tradable on an established
securities market in the United States, and therefore any dividend distributions with respect to our ordinary shares should be
&ldquo;qualified dividends&rdquo; eligible for the preferential tax rate. However, no assurance can be given that the ordinary
shares will remain readily tradable. The preferential rate does not apply unless certain holding period requirements are satisfied.
With respect to the ordinary shares, the U.S. Holder must have held such shares for at least 61 days during the 121-day period
beginning 60 days before the ex-dividend date. The preferential rate also does not apply to dividends received from a passive
foreign investment company or in respect of certain hedged positions or in certain other situations. The legislation enacting
the preferential tax rate on qualified dividends contains special rules for computing the foreign tax credit limitation of a taxpayer
who receives dividends subject to the preferential tax rate. U.S. Holders of ordinary shares should consult their own tax advisors
regarding the effect of these rules in their particular circumstances.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Additional Tax on Investment Income</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In addition to the income taxes described
above, U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds, will be subject to a
3.8% Medicare contribution tax on net investment income, which includes dividends and capital gains.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Disposition of Ordinary Shares</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">If you sell or otherwise dispose of ordinary
shares, you will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the
amount realized on the sale or other disposition and your adjusted tax basis in the ordinary shares. Subject to the discussion
below under the heading &ldquo;Passive Foreign Investment Companies,&rdquo; such gain or loss generally will be capital gain or
loss and will be long-term capital gain or loss if you have held the ordinary shares for more than one year at the time of the
sale or other disposition. Long-term capital gain realized by a non-corporate U.S. Holder is generally eligible for a preferential
tax rate (currently at 20%). In general, any gain that you recognize on the sale or other disposition of ordinary shares will
be U.S.-source for purposes of the foreign tax credit limitation; losses will generally be allocated against U.S. source income.
Deduction of capital losses is subject to certain limitations under the Code.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In the case of a cash basis U.S. Holder
who receives NIS in connection with the sale or disposition of ordinary shares, the amount realized will be based on the U.S.
dollar value of the NIS received with respect to the ordinary shares as determined on the settlement date of such exchange. A
U.S. Holder who receives payment in NIS and converts NIS into United States dollars at a conversion rate other than the rate in
effect on the settlement date may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">An accrual basis U.S. Holder may elect
the same treatment required of cash basis taxpayers with respect to a sale or disposition of ordinary shares, provided that the
election is applied consistently from year to year. Such election may not be changed without the consent of the IRS. In the event
that an accrual basis U.S. Holder does not elect to be treated as a cash basis taxpayer (pursuant to the Treasury regulations
applicable to foreign currency transactions), such U.S. Holder may have a foreign currency gain or loss for U.S. federal income
tax purposes because of differences between the U.S. dollar value of the currency received on the trade date and on the settlement
date. Any such currency gain or loss would be treated as ordinary income or loss and would be in addition to the gain or loss,
if any, recognized by such U.S. Holder on the sale or disposition of such ordinary shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Passive Foreign Investment Companies</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">In general, a non U.S. corporation will
be considered a passive foreign investment company, PFIC, if (i) 75% or more of its gross income consists of passive income, or
(ii) 50% or more of the average value of its assets consists of assets that produce, or are held for the production of passive
income. For purposes of the above calculation, a non U.S. corporation that directly or indirectly owns at least 25% by value of
the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and
received</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">directly its proportionate share of the income of the other
corporation. Passive income generally includes dividends, interest, certain royalties, rents, annuities and the excess of gains
over losses from the disposition of assets which produce passive income.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Based on our current and projected income,
assets and activities, we believe that we are not currently a PFIC, nor do we expect to become a PFIC in the foreseeable future.
However, because the determination of whether we are a PFIC is based upon the composition of our income and assets from time to
time, there can be no assurances that we will not become a PFIC in this or any future taxable year.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">If we were to be treated as a PFIC for
any taxable year during which a U.S. Holder held ordinary shares, such U.S. Holder would be required to file IRS Form 8621 (Information
Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund). In addition, the favorable tax rates
described above with respect to dividends paid to certain non-corporate U.S. Holders would not apply if we were a PFIC for the
taxable year of distribution or the preceding taxable year.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">If we were determined to be a PFIC for
U.S. federal income tax purposes, highly complex rules would apply to U.S. Holders owning, directly or indirectly, ordinary shares.
Accordingly, you are urged to consult your tax advisors regarding the application of such rules.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B><I>Backup Withholding and Information Reporting</I></B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Payments in respect of ordinary shares
may be subject to information reporting to the U.S. Internal Revenue Service and to U.S. backup withholding tax at a rate of 28%.
Backup withholding will not apply, however, if you (i) are a corporation or other exempt recipient, or (ii) furnish a correct
taxpayer identification number and make any other required certification.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Backup withholding is not an additional
tax. Amounts withheld under the backup withholding rules are properly credited against a U.S. Holder&rsquo;s U.S. tax liability,
and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate
tax return or other claim for refund with the IRS.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">U.S. individuals that hold certain specified
foreign financial assets, including stock in a foreign corporation, with values in excess of certain thresholds are required to
file Form 8938 (Statement of Specified Foreign Financial Assets) with their US Federal income tax return. U.S. Holders are urged
to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition
of our ordinary shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_010"></A>UNDERWRITING</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We and the underwriters for the offering
named below have entered into an underwriting agreement with respect to the ordinary shares being offered. Subject to the terms
and conditions of the underwriting agreement, each underwriter has severally agreed to purchase from us the number of ordinary
shares set forth opposite its name below. Cowen and Company, LLC is the representative of the underwriters.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84%; text-align: left; vertical-align: bottom"><P STYLE="border-bottom: Black 0.75pt solid; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><B>Underwriter</B></P></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%"><P STYLE="border-bottom: Black 0.75pt solid; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>Number
        of<BR>
 Shares</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Cowen and Company, LLC</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.5in; padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Total</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double"></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The underwriting agreement provides that
the obligations of the underwriters are subject to certain conditions precedent and that the underwriters have agreed, severally
and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased, other
than those shares covered by the overallotment option described below. If an underwriter defaults, the underwriting agreement
provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be
terminated.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We have agreed to indemnify the underwriters
against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters
may be required to make in respect thereof.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The underwriters are offering the shares,
subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel and
other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify offers
to the public and to reject orders in whole or in part.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Overallotment Option to Purchase Additional
Shares</I>. We have granted to the underwriters an option to purchase up to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional ordinary shares at the public offering
price, less the underwriting discount. This option is exercisable for a period of 30 days. The underwriters may exercise this
option solely for the purpose of covering overallotments, if any, made in connection with the sale of ordinary shares offered
hereby. To the extent that the underwriters exercise this option, the underwriters will purchase additional ordinary shares from
us in approximately the same proportion as shown in the table above.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Discounts and Commissions</I>. The
following table shows the public offering price, underwriting discount and proceeds, before expenses to us. These amounts are
shown assuming both no exercise and full exercise of the underwriters' option to purchase additional shares.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We estimate that the total expenses of
the offering, excluding underwriting discount, will be approximately $ and are payable by us.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3"><P STYLE="border-bottom: Black 0.75pt solid; font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>Total</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 55%; border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Per
    Share</B></FONT></TD>
    <TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Without
    Over-</B></FONT><BR>
    <FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Allotment</B></FONT></TD>
    <TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>With
    Over-</B></FONT><BR>
    <FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Allotment</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Public offering price</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Underwriting discount</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Proceeds, before expenses, to Company</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">The underwriters propose to offer the
ordinary shares to the public at the public offering price set forth on the cover of this prospectus supplement. The underwriters
may offer the shares of ordinary shares to securities dealers at the public offering price less a concession not in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. If all of the shares are not sold at the public offering price, the underwriters may change the offering price and
other selling terms.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Stock Exchange Listing</I>. Our ordinary
shares are listed on The NASDAQ Capital Market under the symbol &quot;SPCB.&quot; The transfer agent for our ordinary shares to
be issued in this offering is American Stock Transfer &amp; Trust Company, LLC.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Discretionary Accounts</I>. The underwriters
do not intend to confirm sales of the shares to any accounts over which they have discretionary authority.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Stabilization</I>. In connection with
this offering, the underwriters may engage in stabilizing transactions, overallotment transactions, syndicate covering transactions,
penalty bids and purchases to cover positions created by short sales.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Stabilizing
                                         transactions permit bids to purchase ordinary shares so long as the stabilizing bids
                                         do not exceed a specified maximum, and are engaged in for the purpose of preventing or
                                         retarding a decline in the market price of the ordinary shares while the offering is
                                         in progress.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Overallotment
                                         transactions involve sales by the underwriters of ordinary shares in excess of the number
                                         of shares the underwriters are obligated to purchase. This creates a syndicate short
                                         position which may be either a covered short position or a naked short position. In a
                                         covered short position, the number of shares over-allotted by the underwriters is not
                                         greater than the number of shares that they may purchase in the overallotment option.
                                         In a naked short position, the number of shares involved is greater than the number of
                                         shares in the overallotment option. The underwriters may close out any short position
                                         by exercising their overallotment option and/or purchasing shares in the open market.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Syndicate
                                         covering transactions involve purchases of ordinary shares in the open market after the
                                         distribution has been completed in order to cover syndicate short positions. In determining
                                         the source of shares to close out the short position, the underwriters will consider,
                                         among other things, the price of shares available for purchase in the open market as
                                         compared with the price at which they may purchase shares through exercise of the overallotment
                                         option. If the underwriters sell more shares than could be covered by exercise of the
                                         overallotment option and, therefore, have a naked short position, the position can be
                                         closed out only by buying shares in the open market. A naked short position is more likely
                                         to be created if the underwriters are concerned that after pricing there could be downward
                                         pressure on the price of the shares in the open market that could adversely affect investors
                                         who purchase in the offering.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Penalty
                                         bids permit the representative to reclaim a selling concession from a syndicate member
                                         when the ordinary shares originally sold by that syndicate member are purchased in stabilizing
                                         or syndicate covering transactions to cover syndicate short positions.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">These stabilizing transactions, syndicate
covering transactions and penalty bids may have the effect of raising or maintaining the market price of our ordinary shares or
preventing or retarding a decline in the market price of our ordinary shares. As a result, the price of our ordinary shares in
the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters
make any representation or prediction as to the effect that the transactions described above may have on the price of our ordinary
shares. These transactions may be effected on the NASDAQ Stock Market, in the over-the-counter market or otherwise and, if commenced,
may be discontinued at any time.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Passive Market Making</I>. In connection
with this offering, underwriters and selling group members may engage in passive market making transactions in our ordinary shares
on the NASDAQ Stock Market in accordance with Rule 103 of Regulation M under the Exchange Act during a period before the commencement
of offers or sales of ordinary shares and extending through the completion of the distribution. A passive market maker must display
its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered
below the passive market maker's bid, that bid must then be lowered when specified purchase limits are exceeded.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Lock-Up Agreements</I>. Pursuant to
certain ''lock-up'' agreements, we and our executive officers, directors and certain of our other shareholders, have agreed, subject
to certain exceptions, not to offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of or announce the
intention to otherwise dispose of, or enter into any swap, hedge or similar agreement or arrangement that transfers, in whole
or in part, the economic consequence of ownership of, directly or indirectly, or make any demand or request or exercise any right
with respect to the registration of, or file with the Securities and Exchange Commission a registration statement under the Securities
Act relating to, any ordinary shares or securities convertible into or exchangeable or exercisable for any ordinary shares without
the prior written consent of Cowen and Company, LLC, for a period of 90 days after the date of the pricing of the offering. The
90-day restricted period will be automatically extended if (i) during the last 17 days of the 90-day restricted period we issue
an earnings release or material news or a material event relating to us occurs or (ii) prior to the expiration of the 90-day restricted
period, we announce that we will release earnings results or become aware that material news or a material event will occur during
the 16-day period beginning on the last day of the 180-day restricted period, in either of which case the restrictions described
above will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">This lock-up provision applies to ordinary
shares and to securities convertible into or exchangeable or exercisable for ordinary shares. It also applies to ordinary shares
owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires
the power of disposition, The exceptions permit us, among other things and subject to restrictions, to: (a) issue ordinary shares
or options pursuant to employee benefit plans, (b) issue ordinary shares upon exercise of outstanding options or warrants (c)
issue securities in connection with acquisitions or similar transactions, or (d) file registration statements on Form S-8. The
exceptions permit parties to the ''lock-up'' agreements, among other things and subject to restrictions, to: (a) make certain
gifts, (b) if the party is a corporation, partnership, limited liability company or other business entity, make transfers to any
shareholders, partners, members of, or owners of similar equity interests in, the party, or to an affiliate of the party, if such
transfer is not for value, and (c) if the party is a corporation, partnership, limited liability company or other business entity,
make transfers in connection with the sale or transfer of all of the party's capital stock, partnership interests, membership
interests or other similar equity interests, as the case may be, or all or substantially all of the party's assets, in any such
case not undertaken for the purpose of avoiding the restrictions imposed by the &quot;lock-up&quot; agreement. In addition, the
lock-up provision will not restrict broker-dealers from engaging in market making and similar activities conducted in the ordinary
course of their business.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Cowen and Company, LLC, in its sole discretion,
may release our ordinary shares and other securities subject to the lock-up agreements described above in whole or in part at
any time. When determining whether or not to release our ordinary shares and other securities from lock-up agreements, Cowen and
Company, LLC will consider, among other factors, the holder's reasons for requesting the release, the number of shares for which
the release is being requested and market conditions at the time of the request. In the event of such a release or</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">waiver for one of our directors or officers, Cowen and Company,
LLC shall provide us with notice of the impending release or waiver at least three business days before the effective date of
such release or waiver and we will announce the impending release or waiver by issuing a press release at least two business days
before the effective date of the release or waiver.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>United Kingdom</I>. The underwriters:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">have
                                         not made or will not make an offer of the securities to the public in the United Kingdom
                                         within the meaning of section 102B of the Financial Services and Markets Act 2000 (as
                                         amended) (FSMA) except to legal entities which are authorized or regulated to operate
                                         in the financial markets or, if not so authorized or regulated, whose corporate purpose
                                         is solely to invest in securities or otherwise in circumstances which do not require
                                         the publication by us of a prospectus pursuant to the Prospectus Rules of the Financial
                                         Services Authority (FSA);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">have
                                         only communicated or caused to be communicated and will only communicate or cause to
                                         be communicated an invitation or inducement to engage in investment activity (within
                                         the meaning of section 21 of FSMA) to persons who have professional experience in matters
                                         relating to investments falling within Article 19(5) of the Financial Services and Markets
                                         Act 2000 (Financial Promotion) Order 2005 or in circumstances in which section 21 of
                                         FSMA does not apply to us; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">have
                                         complied with and will comply with all applicable provisions of FSMA with respect to
                                         anything done by it in relation to the securities in, from or otherwise involving the
                                         United Kingdom.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Switzerland</I>. The ordinary shares
will not be offered, directly or indirectly, to the public in Switzerland and this prospectus does not constitute a public offering
prospectus as that term is understood pursuant to article 652a or 1156 of the Swiss Federal Code of Obligations.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>European Economic Area</I>. In relation
to each Member State of the European Economic Area (the &quot;EEA&quot;) which has implemented the European Prospectus Directive
(each, a &quot;Relevant Member State&quot;), an offer of our ordinary shares may not be made to the public in a Relevant Member
State other than:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">to
                                         any legal entity which is a qualified investor, as defined in the European Prospectus
                                         Directive;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">to
                                         fewer than 100 or, if the Relevant Member State has implemented the relevant provision
                                         of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified
                                         investors as defined in the European Prospectus Directive), subject to obtaining the
                                         prior consent of the relevant dealer or dealers nominated by us for any such offer, or;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">in
                                         any other circumstances falling within Article 3(2) of the European Prospectus Directive,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">provided that no such offer of our ordinary
shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the European Prospectus Directive
or supplement prospectus pursuant to Article 16 of the European Prospectus Directive.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">For the purposes of this description,
the expression an &quot;offer to the public&quot; in relation to the ordinary shares in any Relevant Member State means the communication
in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable
an investor to decide to purchase or subscribe for the ordinary shares, as the expression may be varied in that Relevant Member
State by any measure implementing the European Prospectus Directive in that member state, and the expression &quot;European Prospectus
Directive'' means Directive 2003/71/EC (and amendments hereto, including the 2010 PD Amending Directive, to the extent implemented
in the Relevant Member State) and includes any relevant implementing</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">measure in each Relevant Member State. The expression 2010
PD Amending Directive means Directive 2010/73/EU.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Israel</I>. In the State of Israel
this prospectus shall not be regarded as an offer to the public to purchase our ordinary shares under the Israeli Securities Law,
5728 - 1968, which requires a prospectus to be published and authorized by the Israel Securities Authority, if it complies with
certain provisions of Section 15 of the Israeli Securities Law, 5728-1968, including, inter alia, if: (i) the offer is made, distributed
or directed to not more than 35 investors, subject to certain conditions (the &quot;Addressed Investors&quot;); or (ii) the offer
is made, distributed or directed to certain qualified investors defined in the First Addendum of the Israeli Securities Law, 5728
- 1968, subject to certain conditions (the &quot;Qualified Investors&quot;). The Qualified Investors shall not be taken into account
in the count of the Addressed Investors and may be offered to purchase securities in addition to the 35 Addressed Investors. The
company has not and will not take any action that would require it to publish a prospectus in accordance with and subject to the
Israeli Securities Law, 5728 - 1968. We have not and will not distribute this prospectus or make, distribute or direct an offer
to subscribe for our ordinary shares to any person within the State of Israel, other than to Qualified Investors and up to 35
Addressed Investors.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">Qualified Investors may have to submit
written evidence that they meet the definitions set out in of the First Addendum to the Israeli Securities Law, 5728 - 1968. In
particular, we may request, as a condition to be offered ordinary shares, that Qualified Investors will each represent, warrant
and certify to us and/or to anyone acting on our behalf: (i) that it is an investor falling within one of the categories listed
in the First Addendum to the Israeli Securities Law, 5728 - 1968; (ii) which of the categories listed in the First Addendum to
the Israeli Securities Law, 5728 - 1968 regarding Qualified Investors is applicable to it; (iii) that it will abide by all provisions
set forth in the Israeli Securities Law, 5728 - 1968 and the regulations promulgated thereunder in connection with the offer to
be issued ordinary shares; (iv) that the ordinary shares that it will be issued are, subject to exemptions available under the
Israeli Securities Law, 5728 - 1968: (a) for its own account; (b) for investment purposes only; and (c) not issued with a view
to resale within the State of Israel, other than in accordance with the provisions of the Israeli Securities Law, 5728 - 1968;
and (v) that it is willing to provide further evidence of its Qualified Investor status. Addressed Investors may have to submit
written evidence in respect of their identity and may have to sign and submit a declaration containing, inter alia, the Addressed
Investor's name, address and passport number or Israeli identification number.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in">We have not authorized and do not authorize
the making of any offer of securities through any financial intermediary on our behalf, other than offers made by the underwriters
and their respective affiliates, with a view to the final placement of the securities as contemplated in this document. Accordingly,
no purchaser of the shares, other than the underwriters, is authorized to make any further offer of shares on our behalf or on
behalf of the underwriters.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Electronic Offer, Sale and Distribution
of Shares</I>. A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters
or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering
may distribute prospectuses electronically. The representatives may agree to allocate a number of shares to underwriters and selling
group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters
and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus
in electronic format, the information on these websites is not part of this prospectus or the registration statement of which
this prospectus forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter, and should
not be relied upon by investors.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in"><I>Other Relationships</I>. Certain of
the underwriters and their affiliates have provided, and may in the future provide, various investment banking, commercial banking
and other financial services for us and our affiliates for which they have received, and may in the future receive, customary
fees.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_011"></A>LEGAL MATTERS</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">Certain matters concerning
this offering will be passed upon for us by Haynes and Boone, LLP, New York, New York. The validity of the securities being offered
by this prospectus will be passed upon for us by S. Friedman &amp; Co., Tel Aviv, Israel. The underwriters are being represented
by Greenberg Traurig, LLP.</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_012"></A>EXPERTS</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">The financial statements
incorporated in this prospectus by reference to our Annual Report (Form 20-F) for the year ended December 31, 2014, have been
so incorporated in reliance on the report of Brightman Almagor Zohar &amp; Co. a member firm of Deloitte Touche Tohmatsu, an independent
registered public accounting firm, given on the authority of such firm as experts in auditing and accounting.</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_013"></A>WHERE YOU CAN FIND
MORE INFORMATION</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">We file annual
and special reports and other information with the Securities and Exchange Commission (Commission File Number 000-21218). These
filings contain important information that does not appear in this prospectus. For further information about us, you may read
and copy these filings at the Securities and Exchange Commission&rsquo;s Public Reference Room at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549-0102. You may obtain information on the operation of the Public Reference Room by calling the Securities
and Exchange Commission at 1-800-SEC-0330, and may obtain copies of our filings from the public reference room by calling (202)
551-8090. Our Securities and Exchange Commission filings are also available on the Securities and Exchange Commission website
at http://www.sec.gov, which contains periodic reports and other information regarding issuers that file electronically</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; background-color: white; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-indent: 0.25in; background-color: white">This prospectus
supplement is part of the registration statement on Form F-3 filed with the Securities and Exchange Commission in connection with
this offering and does not contain all of the information included in the registration statement. Whenever a reference is made
in this prospectus supplement to any of our contracts or other documents, the reference may not be complete and, for a copy of
the contract or document, you should refer to the exhibits that are a part of the registration statement.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="a_014"></A>INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">The Securities and Exchange
Commission allows us to &ldquo;incorporate by reference&rdquo; the information we have filed with it, which means that we can
disclose important information to you by referring you to those documents. The information we incorporate by reference is an important
part of this prospectus supplement, and later information that we file with the Securities and Exchange Commission will automatically
update and supersede this information. We are incorporating by reference in this prospectus supplement the documents listed below
and all amendments or supplements we may file to such documents, as well as any future filings we may make with the Securities
and Exchange Commission on Form 20-F under the Exchange Act before the time that all of the securities offered by this prospectus
have been sold or de-registered:</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Our
                                         Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the
                                         Securities and Exchange Commission on April 13, 2015;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current
                                         Report on Form 6-K filed with the Securities and Exchange Commission on June 1, 2015;
                                         </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current
                                         Report on Form 6-K filed with the Securities and Exchange Commission on June 10, 2015; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Current Report on Form 6-K/A filed with the Securities and Exchange Commission on June 17, 2015.</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">In addition, we may
incorporate by reference into this prospectus supplement our reports on Form 6-K filed after the date of this prospectus supplement
(and before the time that all of the securities offered by this prospectus supplement have been sold or de-registered) if we identify
in the report that it is being incorporated by reference in this prospectus supplement.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">Certain statements in
and portions of this prospectus supplement update and replace information in the above listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by reference in this prospectus supplement may update and
replace statements in and portions of this prospectus supplement or the above listed documents.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We will provide you
without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus
supplement, other than exhibits to such documents which are not specifically incorporated by reference into such documents. Please
direct your written or telephone requests SuperCom Ltd., 1 Arie Shenkar Street, Hertzliya Pituach 4672514, Israel, Tel: +972-9-8890850.
You may also obtain information about us by visiting our website at www.supercom.com. Information contained in our website is
not part of this prospectus supplement.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We are an Israeli company
and are a &ldquo;foreign private issuer&rdquo; as defined in Rule 3b-4 under the Exchange Act. As a result, (i) our proxy solicitations
are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act, (ii) transactions in our
equity securities by our officers, directors and principal shareholders are exempt from Section 16 of the Exchange Act; and (iii)
we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S.
companies whose securities are registered under the Exchange Act.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">We make available to
our shareholders an annual report containing financial statements that have been examined and reported on, with an opinion expressed
by, an independent registered public accounting firm. Since June 7, 2004, we have been making all required filings with the Securities
and Exchange Commission electronically, and these filings are available via the Internet at the Securities and Exchange Commission&rsquo;s
<FONT STYLE="color: windowtext">website at <U>http://www.sec.gov</U>. </FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; color: red"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><U>PROSPECTUS</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; font-size: 12pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>SUPERCOM
    LTD.</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; font-size: 12pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>$50,000,000</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Ordinary
    Shares</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Warrants</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Debt
    Securities</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Subscription
    Rights</B></FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Units</B></FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may offer to the public from time to time in one or more series or issuances:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">ordinary
                                         shares;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">warrants
                                         to purchase ordinary shares or debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">debt
                                         securities (including convertible debt securities);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">subscription
                                         rights; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         combination of the above, separately or as units.</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
refer to the ordinary shares, warrants and debt securities, subscription rights and units collectively as &ldquo;securities&rdquo;
in this prospectus. Our ordinary shares are listed on the NASDAQ Capital Market under the symbol &ldquo;SPCB.&rdquo; On July 14,
2014, the last reported sale price of an ordinary share of our company on the NASDAQ Capital Market was $9.22.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
securities will have a total public offering price not to exceed $50,000,000. This prospectus provides a general description of
the securities we may offer. Each time we sell securities, we will provide specific terms of the securities offered in a supplement
to this prospectus. The prospectus supplement may also add, update, or change information contained in this prospectus. This prospectus
may not be used to consummate a sale of securities unless accompanied by the applicable prospectus supplement. You should read
both this prospectus and any prospectus supplement together with additional information described under the heading &ldquo;Where
You Can Find More Information&rdquo; and the documents incorporated or deemed to be incorporated by reference carefully before
you make your investment decision.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
will sell these securities directly to our shareholders or to purchasers or through agents on our behalf or through underwriters
or dealers as designated from time to time. If any agents or underwriters are involved in the sale of any of these securities,
the applicable prospectus supplement will provide the names of the agents or underwriters and any applicable fees, commissions,
or discounts. The prospectus supplement for each offering of securities will describe in detail the plan of distribution for that
offering. For general information about the distribution of securities offered, please see &ldquo;<I>Plan of Distribution</I>&rdquo;
in this prospectus on page 17.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Investing
in these securities involves certain risks. Please carefully consider the &ldquo;Risk Factors&rdquo; in Item 3(D) of our most
recent Annual Report on Form 20-F incorporated by reference in this prospectus, the &ldquo;Risk Factors&rdquo; beginning on page
2 of this prospectus, and in any applicable prospectus supplement, for a discussion of the factors you should consider carefully
before deciding to purchase these securities.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">None
of the Securities and Exchange Commission, the Israeli Securities Authority or any state securities commission has approved or
disapproved of the securities being offered by this prospectus, or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
date of this prospectus is July 25, 2014</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>TABLE
OF CONTENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Page</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_pros">PROSPECTUS
    SUMMARY</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_risk">RISK
    FACTORS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_forw">FORWARD-LOOKING
    STATEMENTS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">15</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_ratio">RATIO
    OF EARNINGS TO FIXED CHARGES</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">16</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_cap">CAPITALIZATION
    AND INDEBTEDNESS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">16</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_marke">MARKET
    FOR OUR ORDINARY SHARES</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">16</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_use">USE
    OF PROCEEDS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">17</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_plan">PLAN
    OF DISTRIBUTION</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">17</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_dis">DESCRIPTION
    OF ORDINARY SHARES</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">20</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_diswarra">DESCRIPTION
    OF WARRANTS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">24</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_disdebsecu">DESCRIPTION
    OF DEBT SECURITIES</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">25</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_fore">FOREIGN
    EXCHANGE CONTROLS AND OTHER LIMITATIONS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">28</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_author">AUTHORIZED
    REPRESENTATIVE</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">28</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_offer">OFFERING
    EXPENSES</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">28</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_legal">LEGAL
    MATTERS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">29</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_experts">EXPERTS</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">29</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_where">WHERE
    YOU CAN FIND MORE INFORMATION</A></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">29</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_incor">INCORPORATION
    OF CERTAIN INFORMATION BY REFERENCE</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">29</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.1in; text-indent: -0.1in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A HREF="#parti_enforce">ENFORCEABILITY
    OF CIVIL LIABILITIES</A></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">30</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>You
should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any other
person to provide you with different information. If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this
prospectus. Our business, financial condition, results of operation and prospects may have changed since that date.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
this prospectus, the terms &ldquo;we&rdquo;, &ldquo;us&rdquo;, &ldquo;SuperCom&rdquo; and &ldquo;our&rdquo; mean SuperCom Ltd.
and its subsidiaries, unless otherwise indicated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">All
references to &ldquo;dollars&rdquo; or &ldquo;$&rdquo; in this prospectus are to U.S. dollars, and all references to &ldquo;shekels&rdquo;
or &ldquo;NIS&rdquo; are to New Israeli Shekels.</FONT></P>


<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"></FONT></P>

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<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>



<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="parti_pros"></A><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>PROSPECTUS
SUMMARY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
are a global provider of traditional and digital identity solutions, providing advanced e-Documents, Identification, Monitoring,
and Tracking solutions and products to governments and private and public organizations. We offer a complete end-to-end, turnkey
and comprehensive solution for various governmental ID programs, based on our state-of-the-art, field-proven OnePlatform Magna<B>&trade;
</B>backbone, to governments around the world. Our OnePlatform Magna backbone can be implemented for a variety of governmental
solutions and applications, Our platform facilitates support<U> </U>across all public e-ID and e-Government applications and services
and creates uniformity and is capable of serving as a single and generic platform that supports various national ID applications
including, population biometric registration, national e-ID/IDs,<U> </U>electronic passports, biometric visas,<U> </U>Smart Drivers&rsquo;
Licenses, smart vehicle licenses, biometric border control, election management, land title secure deed control, internal revenue
service ID documentation, social security identification, and e-Government services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
also offer complete end-to-end, turnkey and comprehensive solutions for various programs for the public safety, healthcare, homecare,
and animal intelligence to markets around the world, based on our state-of-the-art, field-proven machine to machine, or M2M, OnePlatform
PureRF&trade; platform. Our PureRF<FONT STYLE="color: #000066"> </FONT>wireless and mobile hybrid suite of products and technologies
are connected to a web-based, secure, proprietary, interactive and user-friendly platform which can be implemented for various
M2M applications including, detainee monitoring, youth and juvenile supervision, house arrest solutions, supervised medical mobility,
real-time hospital tracking, residential monitoring, medical devices inventory management, pet and livestock management, and workplace
access control.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
were incorporated in Israel in 1988 and changed our name from SuperCom Ltd. to Vuance Ltd. in May 2007. We changed&nbsp;our name
back to SuperCom Ltd. in January 2013. Our principal executive office is located at 1 Arie Shenkar Street, Herzliya Pituach 4672514,
Israel and our telephone number is +972.9.889.0800.&nbsp;&nbsp;Our website address is http://www.supercom.com/.&nbsp;The information
contained on our website is not part of this prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_risk"></A><B>RISK
FACTORS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><I>An
investment in our securities is speculative and involves a high degree of risk. You should carefully consider the following factors
as well as the other information contained in this prospectus and in the other reports that we file with the SEC and that we incorporate
by reference into this prospectus before deciding to invest in our securities. This prospectus and statements that we may make
from time to time may contain forward-looking information. There can be no assurance that actual results will not differ materially
from our expectations, statements or projections. Factors that could cause actual results to differ from our expectations, statements
or projections include the risks and uncertainties relating to our business described below. The information in this prospectus
is complete and accurate as of the date of this prospectus, but the information may change thereafter.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Risks
Related to Our Business</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Although
we expect that the acquisition of&nbsp;the OTI&rsquo;s SmartID Division&nbsp;of On Track Innovations Ltd., or OTI, will result
in benefits to us, we may not realize those benefits due to unforeseen difficulties.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
have concluded the acquisition of the Smart ID Division of OTI on December 2013. Integrating the operations of the SmartID Division
successfully or otherwise realizing any of the anticipated benefits of the acquisition of the Smart ID Division, including anticipated
cost savings and additional revenue opportunities, involves a number of challenges. The failure to meet these integration challenges
could seriously harm our results of operations and the market price of our ordinary shares may decline as a result.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Realizing
the benefits of the acquisition will depend in part on the integration of intellectual property, products, operations, personnel
and sales force and the completion of assignments of current and past contracts and rights. These integration activities are complex
and time<I>-</I>consuming, and we may encounter unexpected difficulties or incur unexpected costs, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">our inability to achieve the operating synergies anticipated in
    the acquisition, which would prevent us from achieving the positive earnings gains expected as a result of the acquisition;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">diversion of management attention from ongoing business concerns
    to integration matters;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">difficulties in consolidating and rationalizing information technology
    and intellectual property platforms and administrative infrastructures;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">complexities associated with managing the combined businesses;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">some personnel transferred from OTI may not integrate well into
    the new combined business and may leave our company, which may result in the loss of specific business knowledge and our ability
    to fully capitalize on the acquired assets and perform current contracts;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">challenges in fulfilling assignments and maintaining the contracts
    and relationships of the SmartID Division, thereby demonstrating to our customers and to customers of the SmartID Division
    that the acquisition caused adverse changes in customer service standards or business focus;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">some contracts or agreements with customers of the SmartID division
    may be terminated by the customers as a result of the acquisition, which will result in major reduction in our anticipated
    combined business revenue; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">some contracts or agreements with service providers and suppliers
    of the SmartID division may be terminated by them as a result of the acquisition which could result in delays and increases
    in our cost of revenues.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may not successfully integrate the operations of the SmartID Division, and may not realize the anticipated net reductions in costs
and expenses and other benefits and synergies of the acquisition to the extent, or in the timeframe, anticipated. In addition
to the integration risks discussed above, our ability to realize these benefits and synergies could be adversely impacted by practical
or legal constraints on our ability to combine operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>If
we are unable to manage our growth profitably, our business, financial results and stock price could suffer.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
future financial results will depend in part on our ability to profitably manage our growth. Management will need to maintain
existing customers and attract new customers, recruit, retain and effectively manage employees, as well as expand operations and
integrate customer support and financial control systems. If integration<I>-</I>related expenses and capital expenditure requirements
are greater than anticipated or if we are unable to manage our growth profitably after the acquisition, our financial results
and the market price of our ordinary shares may decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Purchase
price allocation in connection with our acquisition of OTI&rsquo;s SmartID Division</I>&nbsp;<I>requires estimates which may be
subject to change in the future. Future changes to these estimates could impact our historical or future operating results.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
application of purchase price allocation requires that the total purchase price we paid for the SmartID Division<B>&nbsp;</B>be
allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date. All
amounts in excess of the fair value are recorded as goodwill. The allocation process requires an analysis and valuation of acquired
assets, including fixed assets, technologies, deferred tax assets, customer contracts and relationships, trade names and liabilities
assumed, including contractual commitments and legal contingencies. We identified and recorded the assets, including specifically
identifiable intangible assets, and liabilities assumed in connection with our recent acquisition of OTI&rsquo;s SmartID Division<B>&nbsp;</B>at
their estimated fair values as of the date of the acquisition. This process requires estimates by our management based upon the
best available information at the time of the preparation of the financial statements. These estimates of fair value may change
in the future as we finalize the purchase price allocation. We expect it may take until December 31, 2014 to complete the purchase
price allocation. Any future changes to our estimates of the fair value of the assets and liabilities of OTI&rsquo;s SmartID Division<B>&nbsp;</B>as
of the date of the acquisition could impact our historical or future operating results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>In
the three years ended December 31, 2013, we depended on large orders from one customer for a substantial portion of our revenues.
The loss of this customer or a decrease in its orders could adversely impact our operating results.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
the years ended December 31, 2013, 2012 and 2011, 73%, 64% and 95%, respectively, of our consolidated net revenue are attributable
to sales to a European governmental customer. While we expect to be less dependent on this customer in 2014 and in the future
because of our acquisition of the SmartID Division, a substantial reduction in sales to, or loss of, this customer would adversely
affect our business unless we were able to replace the revenue received from the customer, which replacement we may not be able
to find.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Because
competition in our industry is intense, our business, operating results and financial condition may be adversely affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
global market for e-ID and M2M based enabled products and solutions is highly fragmented and intensely competitive. It is characterized
by rapidly changing technology, frequent new product introductions and rapidly changing customer requirements. We expect competition
to increase with the expected rapid growth of the industry and as competitors allocate additional resources and efforts in order
to secure new contracts. We may not be able to compete successfully against current or future competitors. We face competition
from technologically sophisticated companies, many of which have substantially greater technical, financial, and marketing resources
than we do. In some cases, we compete with entities that have pre-existing relationships with potential customers. As our applicable
markets expand, we expect additional competitors to enter the market. We cannot assure you that we will be able to maintain the
quality of our products and solutions relative to those of our competitors or continue to develop and market new products effectively.
Continued competitive pressures could cause us to lose significant market share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Some
of our competitors and potential competitors have larger technical staffs, larger customer bases, more established distribution
channels, greater brand recognition and greater financial, marketing and other resources than we do. Our competitors may be able
to develop products and services that (i) are superior to our products and services, (ii) achieve greater customer acceptance
or (iii) have significantly improved functionality as compared to our existing and future products and services. In addition,
our competitors may be able to negotiate strategic relationships on more favorable terms than we are able to negotiate. Many of
our competitors may also have well-established relationships with our existing and prospective customers. Increased competition
may result in our experiencing reduced margins, loss of sales or decreased market share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
average selling prices for our products may decline as a result of competitive pricing pressures, promotional programs and customers
who negotiate price reductions in exchange for longer-term purchase commitments. The pricing of products depends on the specific
features and functions of the products, purchase volumes and the level of sales and service support required. As we experience
pricing pressure, the average selling prices and gross margins for our products may decrease over product lifecycles. These same
competitive pressures may require us to write down the carrying value of any inventory on hand, which could adversely affect our
operating results and earnings per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
have sought in the past and will seek in the future to enter into contracts with governments, as well as state and local governmental
agencies and municipalities, which subjects us to certain risks associated with such types of contracts.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Most
contracts with governments or with state or local agencies or municipalities, or Governmental Contracts, are awarded through a
competitive bidding process, and some of the business that we expect to seek in the future will likely be subject to a competitive
bidding process. Competitive bidding presents a number of risks, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the frequent need to compete against companies or teams of companies
    with more financial and marketing resources and more experience than we have in bidding on and performing major contracts;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the need to compete against companies or teams of companies that
    may be long-term, entrenched incumbents for a particular contract we are competing for and which have, as a result, greater
    domain expertise and established customer relations;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the substantial cost and managerial time and effort necessary to
    prepare bids and proposals for contracts that may not be awarded to us;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the need to accurately estimate the resources and cost structure
    that will be required to service any fixed-price contract that we are awarded; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the expense and delay that may arise if our competitors protest
    or challenge new contract awards made to us pursuant to competitive bidding or subsequent contract modifications, and the
    risk that any of these protests or challenges could result in the resubmission of bids on modified specifications, or in termination,
    reduction or modification of the awarded contract.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may not be afforded the opportunity in the future to bid on contracts that are held by other companies and are scheduled to expire,
if the governments, or the applicable state or local agency or municipality determines to extend the existing contract. If we
are unable to win particular contracts that are awarded through the competitive bidding process, we may not be able to operate
in the market for the products and services that are provided under those contracts for a number of years. If we are unable to
win new contract awards or retain those contracts, if any, that we are awarded over any extended period, our business, prospects,
financial condition and results of operations will be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, Governmental Contracts subject us to risks associated with public budgetary restrictions and uncertainties, actual contracts
that are less than awarded contract amounts, and cancellation at any time at the option of the governmental agency. Any failure
to comply with the terms of any Governmental Contracts could result in substantial civil and criminal fines and penalties, as
well as suspension from future contracts for a significant period of time, any of which could adversely affect our business by
requiring us to pay significant fines and penalties or prevent us from earning revenues from Governmental Contracts during the
suspension period. Cancellation of any one of our major Governmental Contracts could have a material adverse effect on our financial
condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Governments
may be in a position to obtain greater rights with respect to our intellectual property than we would grant to other entities.
Governmental agencies also have the power, based on financial difficulties or investigations of their contractors, to deem contractors
unsuitable for new contract awards. Because we will engage in the government contracting business, we will be subject to audits,
and may be subject to investigation, by governmental entities. Failure to comply with the terms of any Governmental Contract could
result in substantial civil and criminal fines and penalties, as well as suspension from future contracts for a significant period
of time, any of which could adversely affect our business by requiring us to pay the fines and penalties and prohibiting us from
earning revenues from Governmental Contracts during the suspension period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Furthermore,
governmental programs can experience delays or cancellation of funding, which can be unpredictable; this may make it difficult
to forecast our revenues on a quarter-by-quarter basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
have incurred operating losses in the past and may not be able to sustain profitable operations in the future. We may not have
sufficient resources to fund our operations in the future.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Although
we had profitable operations in the three years ended December 31, 2013, after three years of losses, there can be no assurance
that we will continue to operate profitably in the future. If we do not generate sufficient cash from operations, we will be required
to obtain additional financing or reduce our level of expenditure. Such financing may not be available in the future, or, if available,
may not be on terms favorable to us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Disruptions,
uncertainty or volatility in the capital and credit markets may also limit our access to capital required to operate our business.
Such market conditions may limit our ability to raise additional capital to support business growth. If we are unable to obtain
necessary additional financing or generate cash from operations, we may be required to reduce the scope of our operations and
may need to implement certain operational changes to decrease our expenses. This would have the potential to decrease both our
ability to attain profitability and our financial flexibility. If adequate funds are not available to us, our business, and results
of operations and financial condition will be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>The
market for our products is characterized by changing technology, requirements, standards and products, and we may be adversely
affected if we do not respond promptly and effectively to these changes.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
market for our products is characterized by evolving technologies, changing industry standards, changing regulatory environments,
frequent new product introductions and rapid changes in customer requirements. The introduction of products embodying new technologies
and the emergence of new industry standards and practices can render existing products obsolete and unmarketable. Our future success
will depend on our ability to enhance our existing products and to develop and introduce, on a timely and cost-effective basis,
new products and product features that keep pace with technological developments and emerging industry standards and address the
increasingly sophisticated needs of our customers. In the future:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">we may not be successful in developing and marketing new products
    or product features that respond to technological change or evolving industry standards;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">we may experience difficulties that could delay or prevent the successful
    development, introduction and marketing of these new products and features; or</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">our new products and product features may not adequately meet the
    requirements of the marketplace and achieve market acceptance.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
we are unable to respond promptly and effectively to changing technologies and market requirements, we will be unable to compete
effectively in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">There
can be no assurance that we will successfully identify new product opportunities and develop and bring new products to market
in a timely manner, or that the products and technologies developed by others will not render our products or technologies obsolete
or noncompetitive. The failure of our new product development efforts could have a material adverse effect on our business, results
of operations and future growth.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
dependence on third-party distributors, sales agents and value-added resellers could result in marketing and distribution delays,
which would prevent us from generating sales revenues.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
market and sell some of our products and solutions using a network of representatives, distributors and resellers covering the
United States, Europe, Asia and Africa. We establish relationships with representatives, distributors and resellers through agreements
that provide prices, discounts and other material terms and conditions under which the reseller is eligible to purchase our systems
and products for resale. These agreements generally do not grant exclusivity to the distributors and resellers and, as a general
matter, are not long-term contracts, do not have commitments for minimum sales, and could be terminated by the distributor. We
do not have agreements with all of our distributors. We are currently engaged in discussions with other potential distributors,
sales agents, and value-added resellers. Such arrangements may never be finalized and, if finalized, such arrangements may not
increase our revenues or enable us to achieve profitability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
ability to terminate a distributor who is not performing satisfactorily may be limited. Inadequate performance by a distributor
could adversely affect our ability to develop markets in the regions for which the distributor is responsible and could result
in substantially greater expenditures by us in order to develop such markets. Our operating results will be highly dependent upon:
(i) our ability to maintain our existing distributor arrangements; (ii) our ability to establish and maintain coverage of major
geographic areas and establish access to customers and markets; and (iii) the ability of our distributors, sales agents, and value-added
resellers to successfully market our products. A failure to achieve these objectives could result in lower revenues.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>If
our technology and solutions cease to be adopted and used by government and public and private organizations, we may lose some
of our existing customers and our operations will be negatively affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
ability to grow depends significantly on whether governmental and public and private organizations adopt our technology and solutions
as part of their new standards and whether we will be able to leverage our expertise in governmental solutions into commercial
solutions. If these organizations do not adopt our technology, we may not be able to penetrate some of the new markets we are
targeting, or we may lose some of our existing customer base.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
order for us to achieve our growth objectives, our e-ID and M2M based technologies and solutions must be adapted to and adopted
in a variety of areas, any or all of which may not adopt our e-ID and M2M based technologies. These areas include, among others:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">national ID and e-Gov;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">public safety;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">healthcare and homecare; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">animal and livestock management.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
cannot accurately predict the future growth rate, if any, or the ultimate size of the e-ID, M2M based markets. The expansion of
the market for our products and services depends on a number of factors such as:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the cost, performance and reliability of our products and services
    compared to the products and services of our competitors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">customer perception of the benefits of our products and solutions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">public perception of the intrusiveness of these solutions and the
    manner in which organizations use the information collected;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">public perception of the privacy protection for their personal information;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">customer satisfaction with our products and services; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">marketing efforts and publicity for our products and services.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Even
if our products and solutions gain wide market acceptance, our products and services may not adequately address market requirements
and may not gain wide market acceptance. If our solutions or our products and services do not gain wide market acceptance, our
business and our financial results will suffer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
need to develop and sustain our position as a provider of e-ID and M2M based solutions and services to earn high margins from
our technology, and if we are unable to develop such position, our business will not be as profitable as we hope, if at all.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
increasing sophistication of our e-ID and M2M based technologies places a premium on providing innovative software systems and
services to customers, in addition to manufacturing and supplying M2M technology. While we have had some early success positioning
ourselves as a provider of such services and systems, we may not continue to be successful with this strategy and we may not be
able to capture a significant share of the market for the sophisticated solutions and services that we believe are likely to produce
attractive margins in the future. A significant portion of the value of our e-ID and, M2M based technologies is based on the development
of software and applications that will permit the use of M2M based technology in selected new markets. In contrast, the margins
involved in manufacturing and selling M2M based technology can be relatively small, and may not be sufficient to permit us to
earn an attractive return on our development investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Unfavorable
global economic conditions may adversely affect our customers, which directly impact our business and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
operations and performance depend on our target customers, including those from the governmental sector, having adequate resources
to purchase our products. The turmoil in the credit markets and the global economic downturn that commenced in 2008 and intensified
in Europe in recent years generally adversely impacted our target customers. Companies and governmental authorities have reduced
or delayed and may continue to reduce or delay their purchasing activities in response to a lack of credit, economic uncertainty,
budget deficits and concern about the general stability of markets. Recently, several European countries encountered severe economic
difficulties which affected the entire Euro-zone economy. The financial crisis, among other things, resulted in the downgrade
of the credit worthiness of several countries in Europe, which affected our customers&rsquo; ability and budget to perform projects
within these territories. If such economic and market conditions remain uncertain or weaken further, specifically changes that
may negatively impact the political or economic stability and environment of the countries from which we derive most of our consolidated
net revenues, our business and future operations may be materially adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
efforts to expand our international operations are subject to a number of risks, any of which could adversely reduce our future
international sales and increase our losses.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Most
of our revenues to date are attributable to sales in jurisdictions other than the United States. For the years ended December
31, 2011, 2012 and 2013, approximately 95.7%, 97.6% and 97.7%, respectively, of our revenues were derived from sales to markets
outside of the United States. Our inability to obtain or maintain federal or foreign regulatory approvals relating to the import
or export of our products on a timely basis could adversely affect our ability to expand our international business. Additionally,
our international operations could be subject to a number of risks, any of which could adversely affect our future international
sales and operating results, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">increased collection risks;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">trade restrictions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">export duties and tariffs;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">uncertain political, regulatory and economic developments;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">inability to protect our intellectual property rights;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">highly aggressive competitors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">currency issues;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">difficulties in staffing, managing and supporting foreign operations;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">longer payment cycles; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">difficulties in collecting accounts receivable.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Negative
developments in any of these areas in one or more countries could result in a reduction in demand for our products, the cancellation
or delay of orders already placed, difficulty in collecting receivables, and a higher cost of doing business, any of which could
adversely affect our business, results of operations or financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, in many countries the national security organizations require our employees to obtain clearance before such employees
can work on a particular transaction. Failure to receive, or delays in the receipt of, relevant foreign qualifications could also
have a material adverse effect on our ability to make sales or fulfill our orders on a timely basis. Additionally, as foreign
government regulators have become increasingly stringent, we may be subject to more rigorous regulation by governmental authorities
in the future. If we fail to adequately address any of these regulations, our business will be harmed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
are exposed to risks in operating in foreign markets, which may make operating in those markets difficult and thereby force us
to curtail our business operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
conducting our business in foreign countries, we are subject to political, economic, legal, operational and other risks that are
inherent in operating in other countries. Risks inherent to operating in other countries range from difficulties in settling transactions
in emerging markets to possible nationalization, expropriation, price controls and other restrictive governmental actions. We
also face the risk that exchange controls or similar restrictions imposed by foreign governmental authorities may restrict our
ability to convert local currency received or held by us in their countries into U.S. dollars or other currencies, or to take
those dollars or other currencies out of those countries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Due
to the nature of our business, our financial and operating results could fluctuate.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
financial and operating results have fluctuated in the past and could fluctuate in the future from quarter to quarter. As a result
of our dependence on a limited number of customers and our increased reliance on our e-ID and M2M products and solutions, our
revenue has experienced wide fluctuations, and we expect that our revenue will continue to fluctuate in the future as we integrate
the operations of the SmartID Division. A portion of our sales is not recurring sales; therefore, quarterly and annual sales levels
will likely fluctuate. Sales in any period may not be indicative of sales in future periods. In addition, our result may fluctuate
from year to year for the following reasons:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">long customer sales cycles;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">reduced demand for our products and services;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">price reductions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">new competitors, or the introduction of enhanced products or services
    from new or existing competitors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">changes in the mix of products and services we or our customers
    and distributors sell;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">contract cancellations, delays or amendments by customers;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the lack of government demand for our products and services or the
    lack of government funds appropriated to purchasing our products and services;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">unforeseen legal expenses, including litigation costs;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">expenses related to acquisitions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">other non-recurring financial charges;</FONT></TD></TR>
</TABLE>
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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the lack of availability, or increased cost, of key components and
    subassemblies; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the inability to successfully manufacture in volume, and reduce
    the price of, certain of our products.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, the period between our initial contact with a potential customer and the purchase of our products and services is often
long and subject to delays associated with the budgeting, approval and competitive evaluation processes that frequently accompany
significant capital expenditures, particularly by governmental agencies. The typical sales cycle for our government customers
has, to date, ranged from nine to 24 months and the typical sales cycle for our commercial customers has ranged from one to six
months. A lengthy sales cycle may have an impact on the timing of our revenue, which may cause our quarterly operating results
to fall below investor expectations. We believe that a customer&rsquo;s decision to purchase our products and services is discretionary,
involves a significant commitment of resources, and is influenced by customer budgetary cycles. To successfully sell our products
and services, we generally must educate our potential customers regarding their use and benefits, which can require significant
time and resources. This significant expenditure of time and resources may not result in actual sales of our products and services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
reliance on third party technologies, raw materials and components for the development of some of our products may delay product
launches, impair our ability to develop and deliver products and hurt our ability to compete in the market.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Most
of our products integrate third-party technology that we license and/or raw materials and components that we purchase or otherwise
obtain the right to use, including: operating systems, microchips, security and cryptography technology for card operating systems
and dual interface technology. Our ability to purchase and license new technologies and components from third parties is and will
continue to be critical to our ability to offer a complete line of products that meets customer needs and technological requirements.
We may not be able to renew our existing licenses or to purchase components and raw materials on favorable terms, if at all. If
we lose the rights to a patented technology, we may need to stop selling or may need to redesign our products that incorporate
that technology. We may also lose the potential competitive advantage such technology gave us. In addition, competitors could
obtain licenses for technologies for which we are unable to obtain licenses, and third parties may develop or enable others to
develop a similar solution to security issues, either of which could adversely affect our results of operations. Also, dependence
on the patent protection of third parties may not afford us any control over the protection of the technologies upon which we
rely. If the patent protection of any of these third parties were compromised, our ability to compete in the market could also
be impaired.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Although
we generally use standard raw materials and components for our systems, some of the key raw materials or components are available
only from limited sources. Even where multiple sources are available, we typically obtain components and raw materials from only
one vendor to ensure high quality, prompt delivery and low cost. If one of our suppliers were unable to meet our supply demands
and we could not quickly replace the source of supply, it could have a material adverse effect on our business, operating results
and financial condition, for reasons including a delay of receipt of revenues and damage to our business reputation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Delays
in deliveries from our suppliers, defects in goods or components supplied by our vendors, or delays in projects that are performed
by our subcontractors could cause our revenues and gross margins to decline.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
rely on a limited number of vendors and subcontractors for certain components of the products we are supplying and projects we
perform. In some cases, we rely on a single source vendor or subcontractor. Any undetected flaws in components or other materials
to be supplied by our vendors could lead to unanticipated costs to repair or replace these parts or materials. If one of our suppliers
were unable to meet our supply demands and we could not quickly replace the source of supply, it could cause a delay of receipt
of revenues and damage our business reputation. We depend on subcontractors to adequately perform a substantial part of our projects.
If a subcontractor fails to fulfill its obligations under a certain project, it could delay our receipt of revenues for such project
and damage our business reputation, and therefore could have a material adverse effect on our business, operating results and
financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Breaches
of network or information technology security, natural disasters or terrorist attacks could have an adverse effect on our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Cyber-attacks
or other breaches of network or information technology (IT) security, natural disasters, terrorist acts or acts of war may cause
equipment failures or disrupt our systems and operations. We may be subject to attempts to breach the security of our networks
and IT infrastructure through cyber-attack, malware, computer viruses and other means of unauthorized access. While we maintain
insurance coverage for some of these events, the potential liabilities associated with these events could exceed the insurance
coverage we maintain. A failure to protect the privacy of customer and employee confidential data against breaches of network
or IT security could result in damage to our reputation. To date, we have not been subject to cyber-attacks or other cyber incidents
which, individually or in the aggregate, resulted in a material impact to our operations or financial condition.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">For
us to further penetrate the marketplace, the marketplace must be confident that we provide effective security protection for national
and other secured identification documents and cards. Although we have not experienced any act of sabotage or unauthorized access
by a third party of our software or technology to date, if an actual or perceived breach of security occurs in our internal systems
or those of our customers, regardless of whether we caused the breach, it could adversely affect the market&rsquo;s perception
of our products and services. This could cause us to lose customers, resellers, alliance partners or other business partners,
thereby causing our revenues to decline. If we or our customers were to experience a breach of our internal systems, our business
could be severely harmed by adversely affecting the market&rsquo;s perception of our products and services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Third
parties could obtain access to our proprietary information or could independently develop similar technologies.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Despite
the precautions we take, third parties may copy or obtain and use our technologies, ideas, know-how and other proprietary information
without authorization or may independently develop technologies similar or superior to our technologies. In addition, the confidentiality
and non-competition agreements between us and most of our employees, distributors and clients may not provide meaningful protection
of our proprietary technologies or other intellectual property in the event of unauthorized use or disclosure. If we are not able
to successfully defend our industrial or intellectual property rights, we may lose rights to technologies that we need to develop
our business, which may cause us to lose potential revenues, or we may be required to pay significant license fees for the use
of such technologies. To date, we have relied primarily on a combination of patents, trade secret and copyright laws, as well
as nondisclosure and other contractual restrictions on copying, reverse engineering and distribution to protect our proprietary
technology.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
current patents and any patents that we may register in the future may provide only limited protection for our technology and
may not be sufficient to provide competitive advantages to us. For example, competitors could be successful in challenging any
issued patents or, alternatively, could develop similar or more advantageous technologies on their own or design around our patents.
Any inability to protect intellectual property rights in our technology could enable third parties to compete more effectively
with us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the
laws of Israel or the United States. Our means of protecting our intellectual property rights in Israel, the United States or
any other country in which we operate may not be adequate to fully protect our intellectual property rights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Third
parties may assert that we are infringing their intellectual property rights; IP litigation could require us to incur substantial
costs even when our efforts are successful.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may face intellectual property litigation, which could be costly, harm our reputation, limit our ability to sell our products,
force us to modify our products or obtain appropriate licenses, and divert the attention of management and technical personnel.
Our products employ technology that may infringe on the proprietary rights of others, and, as a result, we could become liable
for significant damages and suffer other harm to our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Other
than the litigation that was initiated over a decade ago and resolved in 2012, we have not been subject to material intellectual
property litigation to date. We have received demand letters in the past alleging that products or processes of ours are in breach
of patents, which we have denied, but no lawsuits have been filed in respect of such claims.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Litigation
may be necessary in the future to enforce any patents we have or may obtain and/or any other intellectual property rights, to
protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims
of infringement or invalidity, and we may not prevail in any such future litigation. Litigation, whether or not determined in
our favor or settled, could be costly, could harm our reputation and could divert the efforts and attention of our management
and technical personnel from normal business operations. In addition, adverse determinations in litigation could result in the
loss of our proprietary rights, subject us to significant liabilities, require us to seek licenses from third parties, prevent
us from licensing our technology or selling or manufacturing our products, or require us to expend significant resources to modify
our products or attempt to develop non-infringing technology, any of which could seriously harm our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
products may contain technology provided to us by third parties. Because we did not develop such technology ourselves, we may
have little or no ability to determine in advance whether such technology infringes the intellectual property rights of any other
party. Our suppliers and licensors may not be required to indemnify us in the event that a claim of infringement is asserted against
us, or they may be required to indemnify us only with respect to intellectual property infringement claims in certain jurisdictions,
and/or only up to a maximum amount, above which we would be responsible for any further costs or damages. In addition, we have
indemnification obligations to certain parties with respect to any infringement of third-party patents and intellectual property
rights by our products. If litigation were to be filed against these parties in connection with our technology, we would be required
to defend and indemnify such parties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
may have significant differences between forecasted demands to actual orders received, which may adversely affect our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
lead time for ordering parts and materials and building many of our products can be many months. As a result, we must order parts
and materials and build our products based on forecasted demand. If demand for our products lags significantly behind our forecasts,
we may produce more products than we can sell, which can result in cash flow problems and write-offs or write-downs of obsolete
inventory. If demand for our products exceeds our forecasts, our business may be harmed as a result of delays to perform contracts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
rely on the services of certain executive officers and key personnel, the loss of which could adversely affect our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
future success depends largely on the efforts and abilities of our executive officers and senior management and other key employees,
including technical and sales personnel. The loss of the services of any of these persons could adversely affect our business.
We do not maintain any &ldquo;key-person&rdquo; life insurance with respect to any of our employees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
ability to remain competitive depends in part on attracting, hiring and retaining qualified technical personnel; If we are not
successful in such efforts, our business could be disrupted.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
future success depends in part on the availability of qualified technical personnel, including personnel trained in software and
hardware applications within specialized fields. As a result, we may not be able to successfully attract or retain skilled technical
employees, which may impede our ability to develop, install, implement and otherwise service our software and hardware systems
and to efficiently conduct our operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
information technology and network security industries are characterized by a high level of employee mobility and the market for
technical personnel remains extremely competitive in certain regions, including Israel. This competition means that (i) there
are fewer highly qualified employees available for hire, (ii) the costs of hiring and retaining such personnel are high, and (iii)
highly qualified employees may not remain with us once hired. Furthermore, there may be pressure to provide technical employees
with stock options and other equity interests in us, which may dilute our shareholders and increase our expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
additions of new personnel and the departure of existing personnel, particularly in key positions, can be disruptive, might lead
to additional departures of existing personnel and could have a material adverse effect on our business, operating results and
financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Some
of our products are subject to government regulation of radio frequency technology, which could cause a delay in introducing,
or an inability to introduce, such products in the United States and other markets.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
rules and regulations of the United States Federal Communications Commission, or the FCC, limit the radio frequency used by and
level of power emitting from electronic equipment. Our readers, controllers and other radio frequency technology scanning equipment
are required to comply with these FCC rules, which may require certification, verification or registration of the equipment with
the FCC. Certification and verification of new equipment requires testing to ensure the equipment&rsquo;s compliance with the
FCC&rsquo;s rules. The equipment must be labeled according to the FCC&rsquo;s rules to show compliance with these rules. Testing,
processing of the FCC&rsquo;s equipment certificate or FCC registration and labeling may increase development and production costs
and could delay introduction of our verification scanning device and next generation radio frequency technology scanning equipment
into the U.S. market. Electronic equipment permitted or authorized to be used by us through FCC certification or verification
procedures must not cause harmful interference to licensed FCC users, and may be subject to radio frequency interference from
licensed FCC users. Selling, leasing or importing non-compliant equipment is considered a violation of FCC rules and federal law,
and violators may be subject to an enforcement action by the FCC. Any failure to comply with the applicable rules and regulations
of the FCC could have an adverse effect on our business, operating results and financial condition by increasing our compliance
costs and/or limiting our sales in the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
may fail to maintain effective internal control over financial reporting, which could result in material misstatements in our
financial statements.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
Sarbanes-Oxley Act of 2002 imposes certain duties on us and our executives and directors. Our efforts to comply with the requirements
of Section 404 of the Sarbanes-Oxley Act of 2002 governing internal controls and procedures for financial reporting have resulted
in increased general and administrative expense and a diversion of management time and attention, and we expect these efforts
to require the continued commitment of significant resources. Section&nbsp;404 of the Sarbanes-Oxley Act requires management&rsquo;s
annual review and evaluation of our internal control over financial reporting in connection with the filing of the annual report
on Form 20-F for each fiscal year. We may identify material weaknesses or significant deficiencies in our internal control over
financial reporting. Failure to maintain effective internal control over financial reporting could result in material misstatements
in our financial statements. Any such failure could also adversely affect the results of our management&rsquo;s evaluations and
annual auditor reports regarding the effectiveness of our internal control over financial reporting. Failure to maintain effective
internal control over financial reporting could result in investigation or sanctions by regulatory authorities and could have
a material adverse effect on our operating results, investor confidence in our reported financial information and the market price
of our ordinary shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Risks
Related to Our Ordinary Shares</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Volatility
of the market price of our ordinary shares could adversely affect our shareholders and us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
market price of our ordinary shares has been, and is likely to be, highly volatile and could be subject to wide fluctuations in
response to numerous factors, including the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">actual or anticipated variations in our quarterly operating results
    or those of our competitors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">announcements by us or our competitors of technological innovations
    or new and enhanced products;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">developments or disputes concerning proprietary rights;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">introduction and adoption of new industry standards;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">changes in financial estimates by securities analysts;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">market conditions or trends in our industry;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">changes in the market valuations of our competitors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">announcements by us or our competitors of significant acquisitions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">entry into strategic partnerships or joint ventures by us or our
    competitors;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">additions or departures of key personnel;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">political and economic conditions, such as a recession or interest
    rate or currency rate fluctuations or political events; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">other events or factors in any of the countries in which we do business,
    including those resulting from war, incidents of terrorism, natural disasters or responses to such events.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In addition,
the stock market in general, and the market for Israeli companies in particular, has been highly volatile. Many of these factors
are beyond our control and may materially adversely affect the market price of our ordinary shares, regardless of our performance.
In the past, following periods of market volatility, shareholders have often instituted securities class action litigation relating
to the stock trading and price volatility of the company in question. If we were involved in any securities litigation, it could
result in substantial cost to us to defend and divert resources and the attention of management from our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
have a shareholder that is able to exercise substantial influence over us and all matters submitted to our shareholders.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Sigma
Wave Ltd., or Sigma, is the beneficial owner of approximately 29% of our outstanding shares. Such ownership interest gives Sigma
the ability to influence and direct our activities, subject to approvals that may be required for related-party transactions pursuant
to Israeli law. Sigma will have influence over the outcome of most matters submitted to our shareholders, including the election
of directors and the adoption of a merger agreement, and such influence could make us a less attractive acquisition or investment
target. Because the interests of Sigma may differ from the interests of our other shareholders, actions taken by Sigma with respect
to us may not be favorable to our other shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>We
do not expect to pay cash dividends.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
have never paid cash dividends on our ordinary shares and do not anticipate paying cash dividends in the foreseeable future. According
to the Israeli Companies Law, or the Companies Law, dividends may only be paid out of profits legally available for distribution
and provided that there is no reasonable concern that such payment will prevent us from satisfying our existing and foreseeable
obligations as they become due. The payment of dividends will depend on earnings, financial condition, debt covenants in place,
and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not
pay dividends, our ordinary shares may be less valuable because a return on your investment will only occur if our stock price
appreciates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Risks
Related to Our Location and Incorporation in Israel</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Political,
economic and military instability in Israel may disrupt our operations and negatively affect our business condition, harm our
results of operations and adversely affect our share price.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
are incorporated under the laws of, and our principal executive offices and manufacturing and research and development facilities
are located in, the State of Israel. As a result, political, economic and military conditions affecting Israel directly influence
us. Any major hostilities involving Israel, a full or partial mobilization of the reserve forces of the Israeli army, the interruption
or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial
condition of Israel could adversely affect our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Since
its establishment in 1948, Israel has been involved in a number of armed conflicts with its Arab neighbors and a state of hostility,
varying from time to time in intensity and degree, has continued into 2014. Also, since 2011, riots and uprisings in several countries
in the Middle East and neighboring regions have led to severe political instability in several neighboring states and to a decline
in the regional security situation. Such instability may affect the local and global economy, could negatively affect business
conditions and, therefore, could adversely affect our operations. In addition, Iran has threatened to attack Israel and is widely
believed to be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in areas that
neighbor Israel, such as Hamas in Gaza and Hezbollah in Lebanon. Recently the Hamas in Gaza have increased their attacks on Israel
and Israel has retaliated with airborne attacks in the Gaza strip. To date, these matters have not had any material effect on
our business and results of operations; however, the regional security situation and worldwide perceptions of it are outside our
control and there can be no assurance that these matters will not negatively affect us in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Furthermore,
we could be adversely affected by the interruption or reduction of trade between Israel and its trading partners. Some countries,
companies and organizations continue to participate in a boycott of Israeli companies and others doing business with Israel or
with Israeli companies. As a result, we are precluded from marketing our products to these countries, companies and organizations.
Foreign government defense export policies towards Israel could also make it more difficult for us to obtain the export authorizations
necessary for our activities. Also, over the past several years, there have been calls, in Europe and elsewhere, to reduce trade
with Israel. Restrictive laws, policies or practices directed towards Israel or Israeli businesses may have an adverse impact
on our operations, our financial results or the expansion of our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
financial results may be adversely affected by inflation and currency fluctuations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
report our financial results in dollars, while a portion of our expenses, primarily salaries, are paid in NIS. Therefore, our
NIS related costs, as expressed in U.S. dollars, are influenced by the exchange rate between the U.S. dollar and the NIS. The
appreciation of the NIS against the U.S. dollar will result in an increase in the U.S. dollar cost of our NIS expenses. We are
also influenced by the timing of, and the extent to which, any increase in the rate of inflation in Israel over the rate of inflation
in the United States is not offset by the devaluation of the NIS in relation to the dollar. Our dollar costs in Israel will increase
if inflation in Israel exceeds the devaluation of the NIS against the dollar or if the timing of such devaluation lags behind
inflation in Israel. In the past, the NIS exchange rate with the dollar and other foreign currencies had fluctuated, generally
reflecting inflation rate differentials. We cannot predict any future trends in the rate of inflation in Israel or the rate of
devaluation or appreciation of the NIS against the dollar. If the dollar cost of our operations in Israel increases, our dollar
measured results of operations will be adversely affected. From time to time, we engage in currency-hedging transactions intended
to reduce the effect of fluctuations in foreign currency exchange rates on our financial position and results of operations. However,
any such hedging transaction may not materially reduce the effect of fluctuations in foreign currency exchange rates on such results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
operations could be disrupted as a result of the obligation of management or key personnel to perform military service in Israel.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Generally,
all nonexempt male adult citizens and permanent residents of Israel under the age of 40, or older for reserves officers or citizens
with certain occupations, as well as certain female adult citizens and permanent residents of Israel, are obligated to perform
annual military reserve duty and are subject to being called for active duty at any time under emergency circumstances. While
we have operated effectively under these requirements since our incorporation, we cannot predict the full impact of such conditions
on us in the future, particularly if emergency circumstances occur. If many of our employees are called for active duty, our operations
in Israel and our business, operating results and financial condition may be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Your
rights and responsibilities as a shareholder will be governed by Israeli law and differ in some respects from the rights and responsibilities
of shareholders under U.S. law.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
are incorporated under Israeli law. The rights and responsibilities of holders of our ordinary shares are governed by our Memorandum
of Association and Articles of Association and by Israeli law. These rights and responsibilities differ in some respects from
the rights and responsibilities of shareholders in typical U.S. corporations. In particular, a shareholder of an Israeli company
has a duty to act in good faith and customary manner in exercising his or her rights and fulfilling his or her obligations toward
the company and other shareholders, and to refrain from misusing his power, including, among other things, when voting at the
general meeting of shareholders on certain matters. Israeli law provides that these duties are applicable to shareholder votes
on, among other things, amendments to a company&rsquo;s articles of association, increases in a company&rsquo;s authorized share
capital and mergers and interested party transactions requiring shareholder approval. A shareholder also has a general duty to
refrain from exploiting any other shareholder of his or her rights as a shareholder. In addition, a controlling shareholder of
an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who,
under our Articles of Association, has the power to appoint or prevent the appointment of a director or executive officer in the
company, has a duty of fairness toward the company. Israeli law does not define the substance of this duty of fairness, but provides
that remedies generally available upon a breach of contract will apply also in the event of a breach of the duty to act with fairness.
Because Israeli corporate law has undergone extensive revision in recent years, there is little case law available to assist in
understanding the implications of these provisions that govern shareholder behavior.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Provisions
of Israeli law may delay, prevent or otherwise encumber a merger with or an acquisition of our company, which could prevent a
change of control, even when the terms of such transaction are favorable to us and our shareholders.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Israeli
corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special
approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant
to these types of transactions. Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to
some of our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli
tax. These provisions of Israeli law could delay, prevent or impede a merger with or an acquisition of our company, which could
prevent a change of control, even when the terms of such transaction are favorable to us and our shareholders and therefore potentially
depress the price of our shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Our
shareholders may face difficulties in the enforcement of civil liabilities against us and our officers and directors and Israeli
auditors or in asserting U.S. securities law claims in Israel.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Most
of our officers and directors and our Israeli auditors are residents of Israel or otherwise reside outside of the United States.
SuperCom Ltd. is incorporated under Israeli law and its principal office and facilities are located in Israel. All or a substantial
portion of the assets of such persons are or may be located outside of the United States. Therefore, service of process upon SuperCom
Ltd., such directors and officers and our Israeli auditors may be difficult to effect in the United States. It also may be difficult
to enforce a U.S. judgment against SuperCom Ltd., such officers and directors and our Israeli auditors as any judgment obtained
in the United States against such parties may not be collectible in the United States. In addition, it may be difficult to assert
U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation
of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli
court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found
to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process.
Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing these
matters.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B><I>Being
a foreign private issuer exempts us from certain SEC requirements.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">As
a foreign private issuer within the meaning of rules promulgated under the U.S. Securities and Exchange Act of 1934, as amended,
or the Exchange Act, we are exempt from certain provisions applicable to U.S. public companies including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.7pt; text-indent: -17.85pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the rules under the Exchange Act requiring the filing with the SEC
    of quarterly reports on Form 10-Q and current reports on Form 8-K;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the sections of the Exchange Act regulating the solicitation of
    proxies in connection with shareholder meetings;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the provisions of Regulation FD aimed at preventing issuers from
    making selective disclosures of material information; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the sections of the Exchange Act requiring insiders to file public
    reports of their stock ownership and trading activities and establishing insider liability for profits realized from any &ldquo;short-swing&rdquo;
    trading transaction (i.e., a purchase and sale, or sale and purchase, of the issuer&rsquo;s equity securities within less
    than six months).</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Because
of these exemptions, investors are not afforded the same protections or information generally available to investors holding shares
in public companies organized in the U.S.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_forw"></A><B>FORWARD-LOOKING
STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">This
prospectus and the documents incorporated in it by reference contain forward-looking statements which involve known and unknown
risks and uncertainties. We include this notice for the express purpose of permitting us to obtain the protections of the safe
harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. Examples
of forward-looking statements include: projections of capital expenditures, competitive pressures, revenues, growth prospects,
product development, financial resources and other financial matters. You can identify these and other forward-looking statements
by the use of words such as &ldquo;may,&rdquo; &ldquo;plans,&rdquo; &ldquo;anticipates,&rdquo; &ldquo;believes,&rdquo; &ldquo;estimates,&rdquo;
&ldquo;predicts,&rdquo; &ldquo;intends,&rdquo; &ldquo;potential&rdquo; or the negative of such terms, or other comparable terminology.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
ability to predict the results of our operations or the effects of various events on our operating results is inherently uncertain.
Therefore, we caution you to consider carefully the matters described under the caption &ldquo;Risk Factors&rdquo; and certain
other matters discussed in this prospectus, the documents incorporated by reference in this prospectus, and other publicly available
sources. Such factors and many other factors beyond the control of our management could cause our actual results, performance
or achievements to be materially different from any future results, performance or achievements that may be expressed or implied
by the forward-looking statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_ratio"></A><B>RATIO
OF EARNINGS TO FIXED CHARGES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
following table shows our ratio of earnings to fixed charges:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Year
    Ended December&nbsp;31,</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="text-align: center; vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2013</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2011</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2010</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2009</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-style: normal; font-weight: normal">
    <TD STYLE="font-size: 10pt; text-align: left; font-style: normal; font-weight: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">Ratio
    of earnings to fixed charges</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: right; font-style: normal"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">81</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: right; font-style: normal"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">9</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: right; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">2</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: right; font-style: normal"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><SUP>(1)</SUP></FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: right; font-style: normal"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><SUP>(1)</SUP></FONT></TD><TD STYLE="font-size: 10pt; font-weight: normal; text-align: left; font-style: normal"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    </TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(1)
Earnings for the years ended December 31, 2010 and 2009 were inadequate to cover fixed changes by $1,726 and $1,908.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_cap"></A><B>CAPITALIZATION
AND INDEBTEDNESS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The table
below sets forth our capitalization as of March 31, 2014.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">As
    of December 31, 2013</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">(U.S. dollars in thousands)</FONT></TD><TD NOWRAP><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Short-term debt (including current maturities
    of long term loans and debt)</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Long-term loans</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 77%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Total shareholders' equity</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 20%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">19,392</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Total liabilities and shareholders' equity</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">31,708</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_marke"></A><B>MARKET
FOR OUR ORDINARY SHARES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
ordinary shares have been listed on the NASDAQ Capital Market since September 17, 2013 (symbol: SPCB). Our shares previously traded
on the OTCQB electronic quotation service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Annual
Share Price Information</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
following table sets forth, each of the years indicated, the high and low market prices of our ordinary shares on the NASDAQ Capital
Market, or the OTCQB Market, as applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Year</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">High</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Low</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2009</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2.89</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.85</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2010</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1.23</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.21</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2011</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.59</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.17</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2012</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.04</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2013</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">5.65</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.30</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Quarterly
Share Price Information</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: normal 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
following table sets forth, for each of the full financial quarters in the years indicated the high and low market prices of our
ordinary shares on the NASDAQ Capital Market, or the OTCQB Market, as applicable:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">High</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Low</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2012</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">First quarter</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.72</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.09</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Second quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.17</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Third quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.04</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Fourth quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.72</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.04</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2013</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">First quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">1.87</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.21</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Second quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2.30</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">0.94</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Third quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6.12</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2.13</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Fourth quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">4.97</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">3.65</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2014</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">First quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7.41</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">4.63</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Second quarter</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">10.88</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6.21</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Third quarter (through July 14, 2014)</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">10.58</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">8.50</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Monthly
Share Price Information</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
following table sets forth, for the most recent six months, the high and low market prices of our ordinary shares on the NASDAQ
Capital Market:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">High</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Low</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">January 2014</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7.03</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">4.63</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">February 2014</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6.38</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">5.41</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">March 2014</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7.41</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">5.6</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">April 2014</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">8.85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6.21</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">May 2014</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">9.86</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">7.00</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">June 2014</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">10.28</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">8.47</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">July 2014 (through July 14, 2014)</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">10.58</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">8.50</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_use"></A><B>USE
OF PROCEEDS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Except
as otherwise provided in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities
covered by this prospectus for general corporate purposes, which may include working capital expenditures, acquisitions and investments.
Additional information on the use of net proceeds from the sale of securities covered by this prospectus may be set forth in the
prospectus supplement relating to the specific offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_plan"></A><B>PLAN
OF DISTRIBUTION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may sell the securities being offered hereby in any one or more of the following methods from time to time:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">to
                                         or through one or more underwriters on a firm commitment or best efforts basis;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">to
                                         or through dealers, who may act as agents or principals, including a block trade (which
                                         may involve crosses) in which a broker or dealer so engaged will attempt to sell as agent
                                         but may position and resell a portion of the block as principal to facilitate the transaction;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">through
                                         agents;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">through
                                         privately negotiated transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">directly
                                         to purchasers, including our affiliates;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">purchases
                                         by a broker or dealer as principal and resale by such broker or dealer for its own account
                                         pursuant to this prospectus;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">exchange
                                         distributions and/or secondary distributions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">ordinary
                                         brokerage transactions and transactions in which the broker solicits purchasers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">to
                                         one or more underwriters for resale to the public or to investors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">in
                                         &ldquo;at the market offerings,&rdquo; to or through a market maker or into an existing
                                         trading market, on an exchange or otherwise;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">transactions
                                         not involving market makers or established trading markets, including direct sales or
                                         privately negotiated transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">transactions
                                         in options, swaps or other derivatives that may or may not be listed on an exchange;
                                         or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">in
                                         any combination of these methods of sale.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
prospectus supplement with respect to any offering of our securities will set forth the terms of the offering, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         name or names and addresses of any underwriters, dealers or agents;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         purchase price of the securities and the proceeds to us from the sale;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         underwriting discounts and commissions or agency fees and other items constituting underwriters'
                                         or agents' compensation;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         public offering price;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         discounts or concessions allowed or reallowed or paid to dealers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         securities exchanges or markets on which such securities may be listed; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         delayed delivery arrangements.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices related to the prevailing market prices or at negotiated
prices, or in a combination of any of the above noted pricing methods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
securities are sold by means of an underwritten offering, we will execute an underwriting agreement with an underwriter or underwriters,
and the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the terms of the transaction,
including commissions, discounts and any other compensation of the underwriters and dealers, if any, will be set forth in the
prospectus supplement which will be used by the underwriters to sell the securities. If underwriters are utilized in the sale
of the securities, the securities will be acquired by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined
by the underwriters at the time of sale. Maximum compensation to any underwriters, dealers or agents will not exceed any applicable
<FONT STYLE="background-color: white">Financial Industry Regulatory Authority, or</FONT> FINRA, limitations.&nbsp;In particular,
i<FONT STYLE="background-color: white">n compliance with the guidelines of FINRA, the aggregate maximum fees or other items of
value to be received by any FINRA member or independent broker-dealer will not exceed 8% of the gross proceeds of any offering
pursuant to this registration statement.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif; background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly
by the managing underwriters. If any underwriter or underwriters are utilized in the sale of the securities, unless otherwise
indicated in the prospectus supplement, the underwriting agreement will provide that the obligations of the underwriters are subject
to conditions precedent and that the underwriters with respect to a sale of securities will be obligated to purchase all of those
securities if they purchase any of those securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering
price with additional underwriting discounts or commissions. If we grant any over-allotment option, the terms of any over-allotment
option will be set forth in the prospectus supplement relating to those securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
a dealer is utilized in the sales of securities in respect of which this prospectus is delivered, we will sell those securities
to the dealer as principal. The dealer may then resell those securities to the public at varying prices to be determined by the
dealer at the time of resale. Any reselling dealer may be deemed to be an underwriter, as the term is defined in the Securities
Act of the securities so offered and sold. The name of the dealer and the terms of the transaction will be set forth in the related
prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Offers
to purchase securities may be solicited by agents designated by us from time to time. Any agent involved in the offer or sale
of the securities in respect of which this prospectus is delivered will be named, and any commissions payable by us to the agent
will be set forth, in the applicable prospectus supplement. Unless otherwise indicated in the prospectus supplement, any agent
will be acting on a reasonable best efforts basis for the period of its appointment. Any agent may be deemed to be an underwriter,
as that term is defined in the Securities Act of the securities so offered and sold.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Offers
to purchase securities may be solicited directly by us and the sale of those securities may be made by us directly to institutional
investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale
of those securities. The terms of any sales of this type will be described in the related prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
also may sell directly to investors through subscription rights distributed to our shareholders on a pro rata basis. In connection
with any distribution of subscription rights to shareholders, if all of the underlying securities are not subscribed for, we may
sell the unsubscribed securities directly to third parties or may engage the services of one or more underwriters, dealers or
agents, including standby underwriters, to sell the unsubscribed securities to third parties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Underwriters,
dealers, agents and remarketing firms may be entitled under relevant agreements entered into with us to indemnification by us
against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended, or the Securities Act,
that may arise from any untrue statement or alleged untrue statement of a material fact or any omission or alleged omission to
state a material fact in this prospectus, any supplement or amendment hereto, or in the registration statement of which this prospectus
forms a part, or to contribution with respect to payments which the agents, underwriters or dealers may be required to make. We
may use underwriters, dealers, agents and remarketing firms with whom we have a material relationship. We will describe in the
prospectus supplement, naming the underwriter, dealers, agents and/or remarketing firm and the nature of any such relationship.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
so indicated in the prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers
by institutions to purchase securities from us pursuant to contracts providing for payments and delivery on a future date. Institutions
with which contracts of this type may be made include commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all cases those institutions must be approved by us. The
obligations of any purchaser under any contract of this type will be subject to the condition that the purchase of the securities
shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the purchaser is subject. The underwriters
and other persons acting as our agents will not have any responsibility in respect of the validity or performance of those contracts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">One
or more firms, referred to as &quot;remarketing firms,&quot; may also offer or sell the securities, if the prospectus supplement
so indicates, in connection with a remarketing arrangement upon their purchase. Remarketing firms will act as principals for their
own accounts or as agents for us or any of our subsidiaries. These remarketing firms will offer or sell the securities in accordance
with a redemption or repayment pursuant to the terms of the securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
prospectus supplement will identify any remarketing firm and the terms of its agreement, if any, with us or any of our subsidiaries
and will describe the remarketing firm's compensation. Remarketing firms may be deemed to be underwriters in connection with the
securities they remarket. Remarketing firms may be entitled under agreements that may be entered into with us or any of our subsidiaries
to indemnification by us or any of our subsidiaries against certain civil liabilities, including liabilities under the Securities
Act, and may engage in transactions with or perform services for us or any of our subsidiaries in the ordinary course of business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Disclosure
in the prospectus supplement of our use of delayed delivery contracts will include the commission that underwriters and agents
soliciting purchases of the securities under delayed contracts will be entitled to receive in addition to the date when we will
demand payment and delivery of the securities under the delayed delivery contracts. These delayed delivery contracts will be subject
only to the conditions that we describe in the prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
connection with the offering of securities, persons participating in the offering, such as any underwriters, may purchase and
sell securities in the open market. These transactions may include over-allotment and stabilizing transactions and purchases to
cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of bids or purchases
for the purpose of preventing or retarding a decline in the market price of the securities, and syndicate short positions involve
the sale by underwriters of a greater number of securities than they are required to purchase from any issuer in the offering.
Underwriters also may impose a penalty bid, whereby selling concessions allowed to syndicate members or other broker-dealers in
respect of the securities sold in the offering for their account may be reclaimed by the syndicate if the securities are repurchased
by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market
price of the securities, which may be higher than the price that might prevail in the open market, and these activities, if commenced,
may be discontinued at any time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">An
underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance
with Regulation M under the Exchange Act. Overallotment involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified
maximum. Short covering transactions involve purchases of the securities in the open market after the distribution is completed
to cover short positions. Penalty bids permit the underwriter to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a covering transaction to cover short positions. These activities may cause the
price of our securities to be higher than it would otherwise be on the open market. The underwriter may discontinue any of these
activities at any time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">All
securities we offer, other than ordinary shares, will be new issues of securities, with no established trading market. Underwriters
may make a market in these securities, but will not be obligated to do so and may discontinue market making at any time without
notice. We cannot guarantee the liquidity of the trading markets for any securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale shares may not simultaneously
engage in market making activities with respect to the ordinary shares for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_dis"></A><B>DESCRIPTION
OF ORDINARY SHARES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
authorized share capital consists of <FONT STYLE="background-color: white">18,000,000 </FONT>ordinary shares, nominal value NIS
0.25 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">All
of our outstanding ordinary shares are validly issued, fully paid and non-assessable and have equal rights. Our ordinary shares
are not redeemable and do not have any preemptive rights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
description below is a summary of the material provisions of our Articles of Association and of related material provisions of
the Companies Law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Dividend
and&nbsp;Liquidation&nbsp;Rights</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Under
Israeli law, we may declare and pay dividends only if, upon the determination of our board of directors, there is no reasonable
concern that the distribution will prevent us from being able to meet the terms of our existing and foreseeable obligations as
they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings
generated over the two most recent years legally available for distribution according to our then last reviewed or audited financial
statements, provided that the date of the financial statements is not more than six months prior to the date of distribution.
In the event that we do not have retained earnings or earnings generated over the two most recent years legally available for
distribution, we may seek the approval of the court in order to distribute a dividend. The court may approve our request if it
is convinced that there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and
foreseeable obligations as they become due.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of
ordinary shares on a pro-rata basis. Dividend and liquidation rights may be affected by the grant of preferential dividend or
distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Voting</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Holders
of our ordinary shares have one vote per ordinary share on all matters submitted to a vote of shareholders at a shareholder meeting.
Shareholders may vote at shareholder meetings either in person, by proxy or, with respect to certain resolutions, by a voting
instrument.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Israeli
law does not allow public companies to adopt shareholder resolutions by means of written consent in lieu of a shareholder meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Limitations&nbsp;on
the Rights to Own Ordinary Shares in Our Company</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
ownership or voting of ordinary shares by non-residents of Israel is not restricted in any way by our Articles of Association
or the laws of the State of Israel, except for anti-terror legislation and legislation prohibiting citizens of countries in a
state of war with Israel from being recognized as owners of ordinary shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Election
of Directors</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
ordinary shares do not have cumulative voting rights for the election of directors. Rather, under our Articles of Association,
our directors are elected by the holders of a simple majority of our ordinary shares at a general shareholder meeting (excluding
abstentions). As a result, the holders of our ordinary shares that represent more than 50% of the voting power represented at
a shareholder meeting and voting thereon (excluding abstentions) have the power to elect any or all of our directors whose positions
are being filled at that meeting, subject to the special approval requirements for external directors. In addition, under our
Articles of Association, vacancies on our board of directors, including vacancies resulting from there being fewer than the maximum
number of directors permitted by our Articles of Association, may be filled by a vote of a simple majority of the directors then
in office.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Annual&nbsp;and&nbsp;Extraordinary
Meetings</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
are required to convene an annual general meeting of our shareholders at least once every calendar year and within a period of
not more than 15 months following the preceding annual general meeting. Our board of directors may convene a special general meeting
of our shareholders and is required to do so at the request of two directors or one quarter of the members of our board of directors,
or at the request of one or more holders of 5% or more of our outstanding share capital and 1% of our voting power, or the holder
or holders of 5% or more of our voting power. All shareholder meetings require prior notice of at least 21 days. The chairman
of our board of directors presides over our general meetings. However, if at any general meeting the chairman is not present within
15 minutes after the appointed time, or is unwilling to act as chairman of such meeting, then the shareholders present will choose
any other person present to be chairman of the meeting. Subject to the provisions of the Companies Law and the regulations promulgated
thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided
by the board of directors, which may be between four and 40 days prior to the date of the meeting, depending on the type of meeting
and whether written proxies are being used.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Quorum</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Pursuant
to our Articles of Association, the quorum required for a meeting of our shareholders is the presence of two or more shareholders
present in person, by proxy or by a voting instrument, who hold at least 25% of our voting power. A meeting adjourned for lack
of a quorum is generally adjourned one week thereafter at the same time and place, or to such other day, time and place, as our
board of directors may indicate in the notice of the meeting to the shareholders. Pursuant to our Articles of Association, at
the reconvened meeting, the meeting will take place with whatever number of participants is present.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Resolutions</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Under
the Companies Law, unless otherwise provided in our Articles of Association or applicable law, all resolutions of the shareholders
require a simple majority of the voting rights represented at the meeting, in person, by proxy or, with respect to certain resolutions,
by a voting instrument, and voting on the resolution (excluding abstentions). A resolution for the voluntary winding up of the
company requires the approval by the holders of 75% of the voting rights represented at the meeting, in person or by proxy and
voting on the resolution (excluding abstentions).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Access
to&nbsp;Corporate&nbsp;Records</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Under
the Companies Law, all shareholders generally have the right to review minutes of our general meetings, our shareholder register
and register of significant shareholders (as defined in the Companies Law), our Articles of Association, our financial statements
and any document we are required by law to file publicly with the Israeli Companies Registrar or with the Israel Securities Authority.
In addition, any shareholder who specifies the purpose of its request may request to review any document in our possession that
relates to: (i) any action or transaction with a related party which requires shareholder approval under the Companies Law; or
(ii) the approval, by the board of directors, of an action in which an office holder has a personal interest. We may deny a request
to review a document if we determine that the request was not made in good faith, that the document contains a commercial or technological
secret or that the document&rsquo;s disclosure may otherwise impair our interests.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Transfer
of&nbsp;Ordinary&nbsp;Shares and Notices</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Fully
paid ordinary shares are issued in registered form and may be freely transferred under our Articles of Association unless the
transfer is restricted or prohibited by another instrument, Israeli law or the rules of a stock exchange on which the shares are
traded.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Anti-Takeover&nbsp;Provisions;
Mergers and Acquisitions</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Full
Tender Offer</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">A
person wishing to acquire shares of an Israeli public company and who would, as a result, hold over 90% of the target company&rsquo;s
issued and outstanding share capital (or over 90% of the issued and outstanding share capital of a certain class of shares) is
required by the Companies Law to make a tender offer to all of the company&rsquo;s shareholders (or all of the shareholders who
hold shares of the same class) for the purchase of all of the issued and outstanding shares of the company or of a certain class.
If the shareholders who do not respond to or accept the offer hold less than 5% of the issued and outstanding share capital of
the company or of the applicable class of the shares, and more than half of the shareholders who do not have a personal interest
in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by
operation of law. However, a tender offer will also be accepted if the shareholders who do not accept it hold less than 2% of
the issued and outstanding share capital of the company or of the applicable class of the shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Upon
a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder
accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli
court to determine whether the tender offer was for less than fair value and that the fair value should be paid as determined
by the court. However, under certain conditions, the offeror may include in the terms of the tender offer that an offeree who
accepted the offer will not be entitled to petition the Israeli court as described above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
(a) the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital
of the company or of the applicable class or the shareholders who accept the offer constitute less than a majority of the offerees
that do not have a personal interest in the acceptance of the tender offer, or (b) the shareholders who did not accept the tender
offer hold 2% or more of the issued and outstanding share capital of the company (or of the applicable class), the acquirer may
not acquire shares of the company that will increase its holdings to more than 90% of the company&rsquo;s issued and outstanding
share capital or of the applicable class from shareholders who accepted the tender offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Special
Tender Offer</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer
if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company. This
rule does not apply if there is already another holder of 25% or more of the voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Similarly,
the Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender offer if
as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company, provided
there is no other shareholder of the company who holds more than 45% of the voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">These
requirements do not apply if the acquisition (i) occurs in the context of a private placement, that was approved by the company&rsquo;s
shareholders and whose purpose is to give the acquirer at least 25% of the voting rights in the company if there is no person
who holds 25% or more of the voting rights in the company, or as a private placement whose purpose is to give the acquirer 45%
of the voting rights in the company, if there is no person who holds 45% of the voting rights in the company; (ii) was from a
shareholder holding 25% or more of the voting rights in the company and resulted in the acquirer becoming a holder of 25% or more
of the voting rights in the company; or (iii) was from a holder of more than 45% of the voting rights in the company and resulted
in the acquirer becoming a holder of more than 45% of the voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">A
special tender offer must be for shares representing at least 5% of the outstanding voting rights, and must be extended to all
shareholders of a company. The special tender offer may be consummated only if (i) at least 5% of the voting power attached to
the company&rsquo;s outstanding shares will be acquired by the offeror, and (ii) the number of shares tendered in the offer exceeds
the number of shares whose holders objected to the offer (excluding controlling shareholders, holders of 25% or more of the voting
rights in the company and any person having a personal interest in the acceptance of the tender offer).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
the event that a special tender offer is made, a company&rsquo;s board of directors is required to express its opinion on the
advisability of the offer or will abstain from expressing any opinion if it is unable to do so, provided that it gives the reasons
for its abstention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">An
office holder in a target company who, in his or her capacity as an office holder, performs an action the purpose of which is
to cause the failure of an existing or foreseeable special tender offer or is to impair the chances of its acceptance, is liable
to the potential purchaser and shareholders for damages resulting from his acts, unless such office holder acted in good faith
and had reasonable grounds to believe he or she was acting for the benefit of the company. However, office holders of the target
company may negotiate with the potential purchaser in order to improve the terms of the special tender offer, and may further
negotiate with third parties in order to obtain a competing offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
a special tender offer is accepted, then shareholders who did not respond to the special offer or had objected to the special
tender offer may accept the offer within four days of the last day set for the acceptance of the offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
the event that a special tender offer is accepted, then the purchaser or any person or entity controlling it and any corporation
controlled by them must refrain from making a subsequent tender offer for the purchase of shares of the target company and may
not effect a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such
person or entity undertook to effect such an offer or merger in the initial special tender offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Merger</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
Companies Law permits merger transactions if approved by each party&rsquo;s board of directors and, unless certain requirements
described under the Companies Law are met, a majority of each party&rsquo;s shareholders. Under our Articles of Association, a
merger shall require the approval of 66% of the voting rights represented at a meeting of our shareholders and voting on the matter,
in person or by proxy, and any amendment to such provision shall require the approval of 60% of the voting rights represented
at a meeting of our shareholders and voting on the matter, in person or by proxy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
board of directors of a merging company is required pursuant to the Companies Law to discuss and determine whether in its opinion
there exists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its
obligations towards its creditors, taking into account the financial condition of the merging companies. If the board of directors
has determined that such a concern exists, it may not approve a proposed merger. Following the approval of the board of directors
of each of the merging companies, the boards of directors must jointly prepare a merger proposal for submission to the Israeli
Registrar of Companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">For
purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the
shares voting at the shareholders meeting (excluding abstentions) that are held by parties other than the other party to the merger,
any person who holds 25% or more of the outstanding shares or the right to appoint 25% or more of the directors of the other party,
or any one on their behalf including their relatives or corporations controlled by any of them, vote against the merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, if the non-surviving entity of the merger has more than one class of shares, the merger must be approved by each class
of shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
the transaction would have been approved but for the separate approval of each class of shares or the exclusion of the votes of
certain shareholders as provided above, a court may still rule that the company has approved the merger upon the request of holders
of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account
the appraisal of the merging companies&rsquo; value and the consideration offered to the shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Under
the Companies Law, each merging company must send a copy of the proposed merger plan to its secured creditors. Unsecured creditors
are entitled to receive notice of the merger, as provided by the regulations promulgated under the Companies Law. Upon the request
of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists
a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the target
company. The court may also give instructions in order to secure the rights of creditors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the
merger was filed with the Israeli Registrar of Companies and 30 days from the date that shareholder approval of both merging companies
was obtained.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Tax&nbsp;Law</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Israeli
tax law treats some acquisitions, such as stock-for-stock swaps between an Israeli company and a foreign company, less favorably
than U.S. tax law. For example, Israeli tax law may subject a shareholder who exchanges ordinary shares in an Israeli company
for shares in a non-Israeli corporation to immediate taxation unless such shareholder receives authorization from the Israeli
Tax Authority for different tax treatment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Establishment</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
were incorporated under the laws of Israel in 1988 as SuperCom Ltd. and changed our name to Vuance Ltd. on May 14, 2007. We changed&nbsp;&nbsp;our
name back to SuperCom Ltd. in January 2013. We are registered with the Israeli Registrar of Companies in Jerusalem. Our registration
number is 520044074.&nbsp;&nbsp;Our purpose as set forth in our amended and restated articles of association is to engage in any
lawful business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>Transfer&nbsp;Agent&nbsp;and
Registrar</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.3pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
transfer agent and registrar for our ordinary shares is American Stock Transfer &amp; Trust Company, LLC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 35.3pt; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 35.3pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_diswarra"></A><B>DESCRIPTION
OF WARRANTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 35.3pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may issue warrants to purchase ordinary shares and/or debt securities in one or more series together with other securities or
separately, as described in the applicable prospectus supplement. Below is a description of certain general terms and provisions
of the warrants that we may offer. Particular terms of the warrants will be described in the warrant agreements and the prospectus
supplement for the warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
applicable prospectus supplement will contain, where applicable, the following terms of and other information relating to the
warrants:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         specific designation and aggregate number of, and the price at which we will issue, the
                                         warrants;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         currency or currency units in which the offering price, if any, and the exercise price
                                         are payable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         designation, amount, and terms of the securities purchasable upon exercise of the warrants;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         applicable, the exercise price for ordinary shares and the number of ordinary shares
                                         to be received upon exercise of the warrants;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         applicable, the exercise price for our debt securities, the amount of debt securities
                                         to be received upon exercise, and a description of that series of debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         date on which the right to exercise the warrants will begin and the date on which that
                                         right will expire or, if you may not continuously exercise the warrants throughout that
                                         period, the specific date or dates on which you may exercise the warrants;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">whether
                                         the warrants will be issued in fully registered form or bearer form, in definitive or
                                         global form, or in any combination of these forms, although, in any case, the form of
                                         a warrant included in a unit will correspond to the form of the unit and of any security
                                         included in that unit;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         applicable material U.S. federal income tax consequences;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         identity of the warrant agent for the warrants and of any other depositaries, execution
                                         or paying agents, transfer agents, registrars, or other agents;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         proposed listing, if any, of the warrants or any securities purchasable upon exercise
                                         of the warrants on any securities exchange;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         applicable, the date from and after which the warrants and the ordinary shares and/or
                                         debt securities will be separately transferable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         applicable, the minimum or maximum amount of the warrants that may be exercised at any
                                         other time;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">information
                                         with respect to book-entry procedures, if any;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         anti-dilution provisions of the warrants, if any;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         redemption or call provisions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">whether
                                         the warrants are to be sold separately or with other securities as parts of units; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         additional terms of the warrants, including terms, procedures, and limitations relating
                                         to the exchange and exercise of the warrants.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_disdebsecu"></A><B>DESCRIPTION
OF DEBT SECURITIES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may issue debt securities together with other securities or separately, as described in the applicable prospectus supplement,
under an indenture to be entered into between SuperCom Ltd. and the trustee identified in the applicable prospectus supplement.
The terms of the debt securities will include those stated in the indenture and those made part of the indenture by reference
to the Trust Indenture Act of 1939, as in effect on the date of the indenture. The indenture will be subject to and governed by
the terms of the Trust Indenture Act of 1939.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may issue the debt securities in one or more series with the same or various maturities, at par, at a premium, or at a discount.
We will describe the particular terms of each series of debt securities in a prospectus supplement relating to that series, which
we will file with the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
prospectus supplement will set forth, to the extent required, the following terms of the debt securities in respect of which the
prospectus supplement is delivered:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         title of the series;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         aggregate principal amount;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         issue price or prices, expressed as a percentage of the aggregate principal amount of
                                         the debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         limit on the aggregate principal amount;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         date or dates on which principal is payable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         interest rate or rates (which may be fixed or variable) or, if applicable, the method
                                         used to determine such rate or rates;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         date or dates from which interest, if any, will be payable and any regular record date
                                         for the interest payable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         place or places where principal and, if applicable, premium and interest, is payable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         terms and conditions upon which we may, or the holders may require us to, redeem or repurchase
                                         the debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         denominations in which such debt securities may be issuable, if other than denomination
                                         of $1,000, or any integral multiple of that number;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">whether
                                         the debt securities are to be issuable in the form of certificated debt securities or
                                         global debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         portion of principal amount that will be payable upon declaration of acceleration of
                                         the maturity date if other than the principal amount of the debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         currency of denomination;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         designation of the currency, currencies or currency units in which payment of principal
                                         and, if applicable, premium and interest, will be made;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         payments of principal and, if applicable, premium or interest, on the debt securities
                                         are to be made in one or more currencies or currency units other than the currency of
                                         denominations, the manner in which exchange rate with respect to such payments will be
                                         determined;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         amounts of principal and, if applicable, premium and interest may be determined by reference
                                         to an index based on a currency or currencies, or by reference to a commodity, commodity
                                         index, stock exchange index, or financial index, then the manner in which such amounts
                                         will be determined;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         provisions, if any, relating to any collateral provided for such debt securities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         events of default;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         terms and conditions, if any, for conversion into or exchange for ordinary shares;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         depositaries, interest rate calculation agents, exchange rate calculation agents, or
                                         other agents; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         terms and conditions, if any, upon which the debt securities shall be subordinated in
                                         right of payment to other indebtedness of SuperCom Ltd.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">One
or more debt securities may be sold at a substantial discount below their stated principal amount. We may also issue debt securities
in bearer form, with or without coupons. If we issue discount debt securities or debt securities in bearer form, we will describe
material U.S. federal income tax considerations and other material special considerations which apply to these debt securities
in the applicable prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may issue debt securities denominated in or payable in a foreign currency or currencies or a foreign currency unit or units. If
we do, we will describe the restrictions, elections, and general tax considerations relating to the debt securities and the foreign
currency or currencies or foreign currency unit or units in the applicable prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited
with, or on behalf of, a depositary identified in the prospectus supplement. Global securities will be issued in registered form
and in either temporary or definitive form. Unless and until it is exchanged in whole or in part for individual debt securities,
a global security may not be transferred except as a whole by the depositary for such global security to a nominee of such depositary
or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such
nominee to a successor of such depositary or a nominee of such successor. The specific terms of the depositary arrangement with
respect to any debt securities of a series and the rights of and limitations upon owners of beneficial interests in a global security
will be described in the applicable prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>DESCRIPTION
OF SUBSCRIPTION RIGHTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may issue subscription rights to purchase our ordinary shares. These subscription rights may be issued independently or together
with any other security offered hereby and may or may not be transferable by the shareholder receiving the subscription rights
in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with one or
more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any securities
remaining unsubscribed for after such offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
prospectus supplement relating to any subscription rights we offer, if any, will, to the extent applicable, include specific terms
relating to the offering, including some or all of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         price, if any, for the subscription rights;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         exercise price payable for each ordinary share upon the exercise of the subscription
                                         rights;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         number of subscription rights to be issued to each shareholder;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         number and terms of the shares ordinary shares which may be purchased per each subscription
                                         right;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         extent to which the subscription rights are transferable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         other terms of the subscription rights, including the terms, procedures and limitations
                                         relating to the exchange and exercise of the subscription rights;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         date on which the right to exercise the subscription rights shall commence, and the date
                                         on which the subscription rights shall expire;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         extent to which the subscription rights may include an over-subscription privilege with
                                         respect to unsubscribed securities; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">if
                                         applicable, the material terms of any standby underwriting or purchase arrangement which
                                         may be entered into by us in connection with the offering of subscription rights.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
description in the applicable prospectus supplement of any subscription rights we offer will not necessarily be complete and will
be qualified in its entirety by reference to the applicable subscription right agreement, which will be filed with the SEC if
we offer subscription rights. For more information on how you can obtain copies of the applicable subscription right agreement
if we offer subscription rights, see the sections entitled &ldquo;Where You Can Find More Information&rdquo; and &ldquo;Incorporation
of Information by Reference.&rdquo; We urge you to read the applicable subscription right agreement and any applicable prospectus
supplement in their entirety.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>DESCRIPTION
OF UNITS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus,
in any combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Each
unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder
of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is
issued may provide that the securities included in the unit may not be held or transferred separately at any time, or at any time
before a specified date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Any
applicable prospectus supplement will describe:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         material terms of the units and of the securities comprising the units, including whether
                                         and under what circumstances those securities may be held or transferred separately;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         material provisions relating to the issuance, payment, settlement, transfer or exchange
                                         of the units or of the securities comprising the units; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">any
                                         material provisions of the governing unit agreement that differ from those described
                                         above.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
description in the applicable prospectus supplement of any units we offer will not necessarily be complete and will be qualified
in its entirety by reference to the applicable unit agreement, which will be filed with the SEC if we offer units. For more information
on how you can obtain copies of the applicable unit agreement if we offer warrants, see the sections entitled &ldquo;Where You
Can Find More Information&rdquo; and &ldquo;Incorporation of Information by Reference.&rdquo; We urge you to read the applicable
unit agreement and any applicable prospectus supplement in their entirety.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_fore"></A><B>FOREIGN
EXCHANGE CONTROLS AND OTHER LIMITATIONS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Non-residents
of Israel who purchase our ordinary shares may freely convert all amounts received in Israeli currency in respect of such ordinary
shares, whether as a dividend, liquidation distribution or as proceeds from the sale of the ordinary shares, into freely-repatriable
non-Israeli currencies at the rate of exchange prevailing at the time of conversion (provided in each case that the applicable
Israeli income tax, if any, is paid or withheld).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Until
May 1998, Israel imposed extensive restrictions on transactions in foreign currency. These restrictions were largely lifted in
May 1998. Since January 1, 2003, all exchange control restrictions have been eliminated (although there are still reporting requirements
for foreign currency transactions). Legislation remains in effect, however, pursuant to which currency controls can be imposed
by administrative action at any time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
State of Israel does not restrict in any way the ownership or voting of our ordinary shares by non-residents of Israel, except
with respect to subjects of countries that are in a state of war with Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_author"></A><B>AUTHORIZED
REPRESENTATIVE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
authorized representative in the United States for this offering as required pursuant to Section&nbsp;6(a) of the Securities Act
of 1933, is Supercom Inc., 902 Broadway, New York, New York 10010.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_offer"></A><B>OFFERING
EXPENSES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
following is a statement of expenses in connection with the distribution of the securities registered. All amounts shown are estimates
except the SEC registration fee. The estimates do not include expenses related to offerings of particular securities. Each prospectus
supplement describing an offering of securities will reflect the estimated expenses related to the offering of securities under
that prospectus supplement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Securities and Exchange Commission
    registration fee</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">6,440</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Legal fees and expenses</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">13,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Accountants&rsquo; fees and expenses</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">18,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Printing fees</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Miscellaneous</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">2,000</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Total</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;&nbsp;&nbsp;41,840</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_legal"></A><B>LEGAL
MATTERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Carter
Ledyard&nbsp;&amp; Milburn LLP, New York, New York, will be passing upon matters of United States law for us with respect to securities
offered by this prospectus and any accompanying prospectus supplement. The validity of the securities offered hereunder will be
passed upon for us by <FONT STYLE="background-color: white">S. Friedman &amp; Co., Tel Aviv, Israel.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif; background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_experts"></A><B>EXPERTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
financial statements as of December 31, 2013 and for the years ended December 31, 2013 and 2012 incorporated in this prospectus
by reference to our Annual Report on Form 20-F for the year ended December 31, 2013 have been so incorporated in reliance on the
report of Brightman Almagor Zohar &amp; Co., a member firm of Deloitte Touche Tohmatsu, independent registered public accountants,
as set forth in their report thereon and incorporated herein. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">The
financial statements of SuperCom Ltd. (formarly Vuance Ltd.) for the year ended December 31, 2011 incorporated by reference in
this prospectus and elsewhere in the registration statement have been so incorporated by reference in reliance on the report of
Fahn, Kanne &amp; Co. Grant Thornton Israel, a member of Grant Thornton International Ltd., and independent registered public
accountants, upon the authority of said firm as experts in accounting and auditing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_where"></A><B>WHERE
YOU CAN FIND MORE INFORMATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
file annual and special reports and other information with the Securities and Exchange Commission (Commission File Number 000-21218).
These filings contain important information that does not appear in this prospectus. For further information about us, you may
read and copy these filings at the SEC&rsquo;s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0102.
You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330, and may obtain
copies of our filings from the public reference room by calling (202) 551-8090. Our SEC filings are also available on the SEC
Internet site at http://www.sec.gov, which contains periodic reports and other information regarding issuers that file electronically.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_incor"></A><B>INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
file annual and special reports and other information with the Commission (File Number 001-33668). These filings contain important
information which does not appear in this prospectus. The Commission allows us to &ldquo;incorporate by reference&rdquo; information
into this prospectus, which means that we can disclose important information to you by referring you to other documents which
we have filed or will file with the Commission. We are incorporating by reference in this prospectus the documents listed below
and all amendments or supplements we may file to such documents, as well as any future filings we may make with the Commission
on Form 20-F under the Exchange Act before the time that all of the securities offered by this prospectus have been sold or de-registered.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
                                         Annual Report on Form 20-F for the fiscal year ended December 31, 2013;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&middot;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Our
                                         Current Reports on Form 6-K dated May 5, 2014, June 9, 2014 and June 11, 2014.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">In
addition, we may incorporate by reference into this prospectus our reports on Form 6-K filed after the date of this prospectus
(and before the time that all of the securities offered by this prospectus have been sold or de-registered) if we identify in
the report that it is being incorporated by reference in this prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Certain
statements in and portions of this prospectus update and replace information in the above listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements
in and portions of this prospectus or the above listed documents.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in
this prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents.
Please direct your written or telephone requests SuperCom Ltd., 1 Arie Shenkar Street, Hertzliya Pituach 4672514, Israel, Tel:
+972-9-8890850. You may also obtain information about us by visiting our website at www.supercom.com. Information contained in
our website is not part of this prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
are an Israeli company and are a &ldquo;foreign private issuer&rdquo; as defined in Rule 3b-4 under the Securities Exchange Act
of 1934, or Exchange Act. As a result, (i) our proxy solicitations are not subject to the disclosure and procedural requirements
of Regulation 14A under the Exchange Act, (ii) transactions in our equity securities by our officers, directors and principal
shareholders are exempt from Section 16 of the Exchange Act; and (iii) we are not required under the Exchange Act to file periodic
reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered under the Exchange
Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">We
make available to our shareholders an annual report containing financial statements that have been examined and reported on, with
an opinion expressed by, an independent registered public accounting firm. Since June 7, 2004, we have been making all required
filings with the Commission electronically, and these filings are available via the Internet at the Commission&rsquo;s website
at http://www.sec.gov.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><A NAME="parti_enforce"></A><B>ENFORCEABILITY
OF CIVIL LIABILITIES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Service
of process upon us and upon our directors and officers and the Israeli experts named in this prospectus, most of whom reside outside
the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and
substantially all of our directors and officers are located outside the United States, any judgment obtained in the United States
against us or any of our directors and officers may not be collectible within the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">There
is doubt as to the enforceability of civil liabilities under the Securities Act and the Exchange Act in original actions instituted
in Israel. However, subject to specified time limitations, an Israeli court may declare a foreign civil judgment enforceable if
it finds that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         judgment was rendered by a court which was, according to the laws of the state of the
                                         court, competent to render the judgment,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         judgment is no longer appealable,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         obligation imposed by the judgment is enforceable according to the rules relating to
                                         the enforceability of judgments in Israel and the substance of the judgment is not contrary
                                         to public policy, and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         judgment is executory in the state in which it was given.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">Even
if the above conditions are satisfied, an Israeli court will not enforce a foreign judgment if it was given in a state whose laws
do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases) or if its enforcement is likely
to prejudice the sovereignty or security of the State of Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">An
Israeli court also will not declare a foreign judgment enforceable if:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         judgment was obtained by fraud,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">there
                                         was no due process,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         judgment was rendered by a court not competent to render it according to the laws of
                                         private international law in Israel,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">the
                                         judgment is at variance with another judgment that was given in the same matter between
                                         the same parties and which is still valid, or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&bull;</FONT></TD><TD><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">at
                                         the time the action was brought in the foreign court a suit in the same matter and between
                                         the same parties was pending before a court or tribunal in Israel.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">If
a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency. Judgment creditors must
bear the risk of unfavorable exchange rates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font: 10pt Arial, Helvetica, Sans-Serif">&nbsp;</FONT></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt; text-transform: uppercase"><B>SUPERCOM
LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ordinary Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Debt Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Subscription Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Units</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 35%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>PROSPECTUS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 35%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You should rely only on the
information incorporated by reference or provided in this prospectus and in any accompanying prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making any offer to sell or buy any of the securities in
any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any
date other than the date that appears below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;July
25 , 2014</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 79 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: rgb(31,73,123) 3pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>



<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 12pt"><B>Shares</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><IMG SRC="tlogo.jpg" ALT=""></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>Ordinary
Shares</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B>&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: rgb(160,160,160) 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>PROSPECTUS
SUPPLEMENT</B></FONT>&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: rgb(160,160,160) 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>Sole Book-runner</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>Cowen
and Company</B></FONT></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">, 2015</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: rgb(31,73,123) 3pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center"></P>



<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<!-- Field: Page; Sequence: 80; Options: Last -->
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    <!-- Field: /Page -->

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0">&nbsp;&nbsp;</P>


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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
