October 30, 2006
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
| Attn: | Barbara C. Jacobs Assistant Director Mail Stop 4561 |
| Re: | Registration Statement on Form F-3 Filed September 7, 2006 File No. 333-137153 Form 20-F for the period ended December 31, 2005 |
Ladies and Gentlemen:
On behalf of B.O.S. Better Online Solutions, Ltd., an Israel corporation (“BOS” or the “Company”), we are filing herewith Amendment No.1 to the Company’s Registration Statement on Form F-3. We have set forth below the Company’s response to the Staff’s comment letter dated October 5, 2006 with respect to the Registration Statement on Form F-3. The Staff’s comments have been reproduced (in bold) below and are immediately followed by the Company’s responses thereto.
Form F-3
| 1. | You disclose on page 16 that “[t]he note is secured by a first priority floating charge on all of[y]our company’s assets and by a first priority fixed charge on all of [y]our company’s right, titleand interest in [y]our wholly-owned subsidiaries ...”. Please expand your disclosure to further explainthis security interest. In this regard, explain what it means to be secured by a first priority“floating charge” and “fixed charge.” Also, provide additional disclosure in your “Prospectus Summary”and “Risk Factors” section to address the secured nature of this note. |
| The Company has complied with the Staff’s comment. |
| 2. | Please see the immediately preceding comment. We note that your “Secured Convertible Term Note”filed as Exhibit 4.1 refers to a “Master Security Agreement” for a more complete description of thesecurity interest and guarantee of the note. However, we are unable to locate the “Master SecurityAgreement.” Please advise us of the location of this document or file this agreement as an exhibit toyour amended Form F-3, upon re-filing. |
| The Company’s amended Form F-3 filed herewith, includes the Master Security Agreement as Exhibit 4.5. |
| 3. | We note your inclusion of the undertakings associated with the primary offering of securities onpage 20 of your registration statement. In light of the fact that it appears that B.O.S is registeringshares to be resold by selling security holders, it does not appear that an undertaking contemplating aprimary offering is appropriate. Please revise your registration statement or otherwise advise. |
| The Company has revised the registration statement in accordance with the Staff’s comment. |
| 4. | We note the risk factor on page 5 of your Form F-3 regarding the significance of a customeraccounting for 14% of your revenues in year 2005 and 20% of your revenues in the first six months of2006. Please tell us what consideration was given to disclosing summary information regarding theextent to which you are dependent on this customer in your Form 20-F.See Item 4(B)(6) to Form 20-F.Also, tell us whether you considered the need to file the long term sales agreement with the abovereferenced customer pursuant to subsection 4(b) to the “Instructions As To Exhibits” in Form 20-F. Inthis regard, Form 20-F requires that “[a]ny contract upon which [B.O.S] is substantially dependent”should be filed. |
| The Company has filed the long terms sales agreement as an exhibit to its amended annual report on Form 20-F filed with the Securities and Exchange Commission on October 30, 2006, and included in such report a disclosure of the extent to which it is dependent on the applicable customer. |
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| 5. | We note that B.O.S represented to the Staff in its letter of January 12, 2006 that it will take thestaff’s comment regarding the definition of disclosure controls and procedures into consideration inpreparing its future Item 15(a) disclosure. However, you disclose in your Form 20-F that “disclosurecontrols and procedures are designed to ensure that information required to be disclosed by the Companyis accumulated and communicated to the appropriate management, including the principal executiveofficer and financial officer, on the basis that permits timely decisions regarding timely disclosure.”Also, you disclose that your principal executive officer and principal financial officer concluded thatthe Company’s disclosure controls and procedures are effective “to provide reasonable assurance thatthe information required to be disclosed by the Company in reports filed under the Securities ExchangeAct of 1934, as amended, is recorded, processed, summarized and reported within the time periodsspecified in the SEC’s rules and forms.” Item 14(a) requires that your principal executive officer andprincipal financial officer evaluate the effectiveness of your disclosure controls and procedures asdefined by paragraph (e) of 13a-15 or 15d-15. In this regard, your text suggests that the disclosurecontrols and procedures that were evaluated by your principal executive officer and principal financialofficer were narrower than the disclosure controls and procedures defined by paragraph (e) of 13a-15and 15d-15. Accordingly, tell us whether B.O.S’s disclosure controls and procedures were effective asdefined in paragraph (e) of rules 13a-15 and 15d-15 as of the period ended December 31, 2005 andconfirm that B.O.S will evaluate its disclosure controls and procedures required by the definition setforth by the rules in all future reports. |
| The Company has revised its disclosure in Item 15(a) in accordance with the Staff’s comments. The revised disclosure appears in the Company’s amended annual report on Form 20-F filed with the Securities and Exchange Commission on October 30, 2006. |
If you have any questions concerning the responses, please do not hesitate to call me at 212-841-0700.
| Cordially, Brian Brodrick |
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