BOS Issues Letter to Shareholders

RISHON LEZION, Israel--(Business Wire)--
The following is a letter to shareholders of B.O.S. Better Online
Solutions Ltd. ("BOS" or the "Company") (NASDAQ:BOSC) (TASE:BOSC).

Dear Shareholders, Investors and Friends,

This Management Letter marks the beginning of a new tradition at
B.O.S. Better Online Solutions Ltd. ("BOS"), in which we will provide
updates and information supplementing our ongoing press releases.

I have completed my first year as the President and Chief
Executive Officer of BOS and it is with excitement that I look back at
the Company's achievements during this period of time. At the
beginning of 2007, BOS adopted a new strategic vision of becoming a
worldwide leader in providing comprehensive Mobile & RFID solutions,
targeted to improve the control and efficiency of enterprise logistics
and organizational process, monitoring and control.

Strongly committed to this new strategy, BOS embarked on
organizational and structural changes encompassing all divisions of
the Company including moving our geographical locations to focus on
vital business and investment centers.

Financial Overview

We are pleased to present our revenue projections for 2008. For
the full year, we expect to earn pro-forma revenues of $55 million,
which represents a 123% increase in sales over 2007 results. We
estimate EBITDA will be $2 million for 2008.

In order to finance our ambitious growth plan, we were active in
the capital markets in 2007 including raising $2.2 million through a
conversion of debt to equity as well as raising a total of $7.1
million in equity investments. These transactions improved our balance
sheet and better positioned BOS for embarking on its growth
initiatives in 2008 designed to strengthen product offerings and
distribution channels worldwide.

Merger and Acquisitions Strategy

In order to upgrade our technological infrastructure and expand
our software product offerings, we have replaced our senior management
and retained the services of highly motivated and skilled employees.
We then acquired two companies.

In November 2007, we announced the acquisition of Summit Radio
Corp., a U.S. based company, situated in New Jersey. The acquisition
of Summit allows BOS to offer a diversified supply chain solution to
major international aviation and aerospace manufacturers, and provide
BOS' Mobile and RFID solutions platform to the U.S. markets.

Summit is a profitable company, with

(i) A 50-year track record of excellence in the Aviation and
Aerospace sector;

(ii) Strong business relationships with major clients in the
industry;

(iii) Numerous synergies with BOS' supply chain solutions.

In January 2008, we announced the acquisition of the business
operations of Dimex Systems Ltd. This acquisition has transformed BOS
into the largest leading Israeli integrator of AIDC (Automatic
Identification and Data Collection) solutions based on RFID and
Barcode technology, offering Mobile & RFID Solutions in the Data
collection field in Israel.

Dimex has a well established reputation of offering unique and
innovative solutions in the Automatic Identification and Data
Collection ("AIDC") field. Our customers are major Israeli
corporations.

We have already begun to leverage BOS' and Dimex's synergies to
offer solutions that are being well received by the market.

The Mobile & RIFD Solutions

Based on our new capabilities comprising the BOS Group we can now
offer comprehensive (hardware and software) Mobile & RIFD solutions in
international markets and enjoy an increasing presence in these
markets. We have also entered into strong strategic partnerships and
have expanded our worldwide enterprise customer relationships.

We believe that these acquisitions will catapult the scale of our
business and position us for considerably enhanced future
profitability. These two acquisitions have paved the way to greater
presence in the international markets.

BOS' current product offerings include:

-0-
*T
(i) Fully integrated Mobile and RFID Solutions that combine:

(a) Software Applications - RFID Server, system management
application and data collection tools with seamless interface to
business application, and (b) Mobile Infrastructure - Automatic
identification and data collection equipment based on RFID and
barcode technology; and

(ii) Supply Chain Solutions - reselling electronic systems and
components for security, aerospace and networks.
*T

2008 is expected to be the year of synergy, implementation of our
strategy and integration amongst all of the arms constituting the BOS
Group, to offer BOS' two main focuses: fully integrated Mobile and
RFID Solutions and Supply Chain Solutions.

We are confident that the results will be fully reflected in 2009.

A Note of Thanks

I would like to take this opportunity to thank our entire
organization for their continued hard work and effort. We have set out
to build a profitable, leading international Mobile & RFID company.
The acquisitions of Summit and Dimex are a major step in our growth
strategy and ongoing goal of enhancing shareholder value.

Thank you for your continued support of BOS.

Sincerely,

Shmuel Koren,

President and Chief Executive Officer

B.O.S. Better Online Solutions Ltd.

About BOS

B.O.S Better Online Solutions Ltd. ("BOS") was established in
1990.

BOS's operations consist of:

-0-
*T
(i) Fully integrated Mobile and RFID Solutions that combine:

(a) Software Applications - RFID Server, system management
application and data collection tools with seamless interface to
business application, and
(b) Mobile Infrastructure - Automatic identification and data
collection equipment based on RFID and barcode technology; and

(ii) Supply Chain Solutions, reselling electronic systems and
components for security, aerospace and networks.
*T

BOS is traded on NASDAQ and on the Tel-Aviv stock exchange. Our
website is www.boscorporate.com.

The forward-looking statements contained herein reflect
management's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain
risks and uncertainties that could cause the actual results to differ
materially from those in the forward-looking statements, all of which
are difficult to predict and many of which are beyond the control of
BOS. These risk factors and uncertainties include, amongst others, the
dependency of sales being generated from one or few major customers,
the uncertainty of our being able to maintain current gross profit
margins, inability to keep up or ahead of technology and to succeed in
a highly competitive industry, inability to maintain marketing and
distribution arrangements and to expand our overseas markets,
uncertainty with respect to the prospects of legal claims against BOS;
and additional risks and uncertainties detailed in BOS's periodic
reports and registration statements filed with the U.S. Securities
Exchange Commission. BOS undertakes no obligation to publicly update
or revise any such forward-looking statements to reflect any change in
its expectations or in events, conditions or circumstances on which
any such statements may be based, or that may affect the likelihood
that actual results will differ from those set forth in the
forward-looking statements.

B.O.S Better Online Solutions Ltd.
Mr. Zvi Rabin, +972 50-560-0140
zvi@kwan.co.il
or
Mr. Eyal Cohen, CFO, +972-3-954-1000
eyalc@boscom.com

Copyright Business Wire 2008