EXPLANATORY NOTE

This Registration Statement on Form S-8 of B.O.S. Better Online Solutions Ltd. (the “Registrant”) is being filed in connection with the registration of an additional one million one hundred thousand (1,100,000) Ordinary Shares of the Registrant, NIS 4.00 nominal value each (the “Ordinary Shares”), under the Registrant’s 2003 Israeli Share Option Plan. Except as detailed below, the contents of the Registration Statements on Form S-8 (File no. 333-110696 and File no. 333-136957), filed by the Registrant with the Securities and Exchange Commission (the “Commission”) on November 24, 2003, and on August 29, 2006, respectively, are incorporated by reference.

THE REGISTRANT HAS RECEIVED FROM THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN EXEMPTION FROM THE OBLIGATION TO PUBLISH THIS FORM S-8 IN THE MANNER REQUIRED FOR THE PUBLICATION OF A PROSPECTUS PURSUANT TO THE PREVAILING LAWS OF THE STATE OF ISRAEL. NOTHING IN SUCH EXEMPTION SHALL BE CONSTRUED AS AUTHENTICATION OR APPROVAL OF THE RELIABILITY OR ACCURACY OF THE MATTERS CONTAINED IN THIS FORM S-8 OR AS AN EXPRESSION OF OPINION AS TO THE QUALITY OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS FORM S-8.

Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE

Part of the description of the Ordinary Shares of the Registrant that appears in the S-8 Registration Statement file no. 333-110696 has since changed due to amendments to the Registrant’s Articles of Association (the “Articles”). An updated summary description of the Ordinary Shares of the Registrant is incorporated by reference to the Company’s Current Report on Form 6-K filed with the Commission on August 22, 2006.

Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Consistent with the provisions of the Israeli Companies Law, 1999 (the “Companies Law”), the Articles of the Registrant include provisions permitting the Registrant to procure insurance coverage for its “office holders”, exempt them from certain liabilities and indemnify them, to the maximum extent permitted by the Companies Law. An “office holder” is defined in the Companies Law and the Articles as a director, general manager (CEO), chief business manager, deputy general manager, vice president, other manager reporting directly to the general manager and any other person assuming the responsibilities of any of the foregoing positions without regard to such person’s title.

        INSURANCE

Under the Companies Law, a company may obtain insurance for any of its office holders, acting as such, for: (i) a breach of his duty of care to the company or to another person; (ii) a breach of his duty of loyalty to the company provided that the office holder acted in good faith and had reasonable cause to assume that his act would not prejudice the company’s interests; or (iii) a financial liability imposed upon him in favor of another person.

The Registrant has obtained directors’ and office holders’ liability insurance covering its office holders and directors and those of its subsidiaries.

        INDEMNIFICATION

The Companies Law provides that a company may indemnify an office holder against: (i) a financial liability imposed on him in favor of another person by any judgment (including, but not limited to, a settlement agreement approved as a judgment and an arbitration judgment) concerning an act preformed in his capacity as an office holder; (ii) reasonable litigation expenses, including attorneys’ fees, expended by the office holder or charged to him by a court relating to an act preformed in his capacity as an office holder in connection with: (a) proceedings the company institutes against him or instituted on its behalf or by another person; (b) a criminal charge from which he was acquitted; (c) a criminal charge in which he was convicted for a criminal offence that does not require proof of criminal intent; and (d) an investigation or a proceeding instituted against him by an authority competent to administrate such an investigation or proceeding that ended without the filing of an indictment against the office holder and, either without any financial obligation imposed on the office holder in lieu of criminal proceedings; or with financial obligation imposed on him in lieu of criminal proceedings, in a crime which does not require proof of criminal intent. The Articles of the Registrant authorize the Registrant to indemnify its office holders to the fullest extent permitted under the Companies Law. The Companies Law also authorizes a company to undertake in advance to indemnify an office holder with respect to events specified above, provided that, with respect to indemnification under sub-section (i) above, the undertaking: (a) is limited to events which the board of directors determines can be anticipated, based on the activity of the company at the time the undertaking is given; (b) is limited in amount or criteria determined by the board of directors to be reasonable under the circumstances; and (c) specifies the said events and the amounts or criteria.