BOS Better On-Line Solutions Reports Record Revenues for Year Ended December 31, 1996.

TERADYON, Israel--(BUSINESS WIRE)--March 19, 1997--BOS Better On-Line Solutions, Ltd. (NASDAQ:BOSCF) today reported a 35% increase in sales for 1996 versus 1995. 1996 sales revenue totaled $7,364,000, in comparison to $5,454,000 for 1995.

Gross Profit increased 45% in 1996 to $5,158,000 from $3,565,000 in 1995 (70% of sales in 1996 versus 65% of sales in 1995) due to increased sales of software oriented products.

Due mainly to the reasons specified below, BOS reported a net loss of $2,842,000 for 1996, versus a 1995 net profit of $820,000. This net loss can be attributed to the following occurrences:

- the one-time charge associated with the acquisition of

in-process research and development from amounting to $2,475,000;

- the establishment of Lynk, a BOS subsidiary operating in 1996

as a research and development division; the establishment of

OppoSite Software, a BOS division that develops and markets

Windows-based tools for maintaining and improving websites, HTML

pages, and associated files; and the development and marketing of

BOSaNOVA PrintPass IPDS following the acquisition of IPDS

(Intelligent Printer Data Stream) technology and the PrintPass

product and trademark.

- the increase in selling and marketing activities in order to establish

the infrastructure needed to launch in 1997, new products from BOS

and its several subsidiaries.

Research and development costs increased to $3,631,000 in 1996 from $603,000 in 1995, due mainly to the one-time research and development cost of $2,475,000 associated with the Z-NAX acquisition, the research and development cost associated with BOS's subsidiary, Lynk (R&D division in 1996), and the recruitment of research and development personnel for OppoSite Software and IPDS Printing Technology.

Commenting on these results, BOS President Israel Gal stated that in spite of the net loss, which reflects a one-time strategic acquisition, the higher revenues generated by operations in 1996 this year markedly demonstrate the increased effectiveness of the company's R&D and marketing activities. Gal said he is greatly encouraged by the significant growth in sales and the considerable increase in gross profit shown in 1996, a trend he expects to continue in 1997.

Gal also cited BOS's decision to establish Lynk and OppoSite Software and to acquire PrintPass IPDS technology as a strategic investment in the company's future in both the near and long terms. The company expects to market its Lynk, OppoSite Software and PrintPass IPDS products throughout 1997.

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 the company, including, but not limited to, those risks and uncertainties detailed in the company's periodic reports and registration statements filed with the Securities and Exchange Commission. -0-

                  B.O.S. Better OnLine Solutions Ltd.
                     (An Israeli Corporation)
                Condensed Consolidated Balance Sheets

                                          December 31
                               1996                       1995
                               U.S. $ in thousands

ASSETS
Current Assets
 Cash and Cash Equivalents     5,422                      1,203
 Marketable Securities                                      411
  Accounts receivables:
     Trade                     2,106                      1,323
     Other                       561                        344
Inventories                    1,104                        811
Total Current Assets           9,183                      4,092

Fixed Assets
  Cost                         2,139                      1,112(a)
  Less-accumulated
  depreciation and
  amortization                   623                        374
                               1,516                        738

Other Assets and Deferred
 Charges                         336                        516
                              11,045                      5,346
(a) Reclassified

LIABILITIES AND SHAREHOLDERS'
EQUITY

Current Liabilities
 Current maturities of
 long-term bank loans                                        113
 Accounts payable and
  accruals:
  Trade                          698                         637
  Other                          994                         913
Total current liabilities      1,692                       1,663

Long-term Bank Loans, net of
 current maturities                                          188

Accrued Severance Pay             109                         83

Total Liabilities                1,801                     1,914

Minority Interest                   15                        28

Shareholders' Equity
Share capital- ordinary shares of
NIS 1 per value                 2,382                      1,728
Redeemable Warrants               201
Premium on shares               8,323
Capital surplus                   166                       166
Receipts on account of
shares to be allotted                                       511
Retained earnings
(accumulated deficit)           (1,843)                     999
                                 9,229                    3,404
                                11,045                    5,348


                  B.O.S. Better Online Solutions Ltd.
                    (an Israeli Corporation)
          Condensed Consolidated Statements of Income (loss)

                      Year Ended December 31,
                    1996                 1995
                        US$'s in thousands
                      (except per share data)

Sales              7,364                 5,454
Cost of sales      2,206                 1,889
Gross profit       5,158                 3,565

Research and
  Development
  costs:

Expenses incurred
  in respect of
  company's
  activities       2,072                 1,475

less - grants       (916)                 (872)

In process
  research and
  development
  acquired from
  Z-NAX
  Communications
  Ltd.             2,475                  N/A

Net Research and
  Development
  Costs            3,631                  603

Selling, General
  and Administrative
  Expenses         4,555                2,176

Operating Income
  (loss)          (3,028)                 786
Financial Expense    (51)                 (55)
Financial Income     218                  118

Income (Loss) before
  Taxes on Income (2,861)                 849

Taxes on Income       20                   36

Income (loss) from
  Operations      (2,881)                 814

Minority Interest
  in Loss of
  Subsidiary          39                    6

Net income (loss) (2,842)                 820

Earnings (loss)
  per share       $(0.41)              $ 0.15

Weighted Average
  Number of Shares
  Outstanding -
  in Thousands     6,870                5,439


                    B.O.S. Better Online Solutions Ltd.
                            (An Israeli Corp.)
    Condensed Consolidated Statements of Changes in Shareholders' Equity
                          U.S. $ in thousands

                              Share    Redeemable   Premium   Capital
                             Capital    Warrants   on Shares  Surplus


Balance at Jan. 1, 1995         231                            1,110
Changes during the year
 ended Dec. 31, 1995:
Net Income
Allotment of Bonus Share      1,497                           (1,110)
Receipts on account of
 shares to be allotted
Surplus arising from
 minority shareholders'
 equity investment in
 subsidiary                                                     166
Balance at Dec. 31, 1995      1,728                     0       166
Changes during 1996:
Loss
Issuance of share capital
 prior to the public offering    56                   639
Issuance of share capital
 and redeemable warrants
 in an Initial public offering  513       201       5,875
Issuance of share capital
 in respect of the in process
 research and development
 acquired from Z-NAX
 Communications Ltd.             85                 1,809
Balance at Dec. 31, 1996      2,382       201       8,323     166

                         Receipts on    Retained
                         Accounts of    Earnings
                          Shares to    (Accumulated
                         be Allotted    Deficit)    Total

Balance at Jan. 1, 1995          86         566      1,973
Changes during the year
 ended Dec. 31, 1995
Net Income                                  820        820
Allotment of Bonus Shares                  (367)
Receipts on account of
 shares to be allotted          445                    445
Surplus arising from
 minority shareholders'
 equity investment in
 subsidiary                                            166
Balance at Dec. 31, 1995        511         999      3,404
Changes during 1996:
Loss                                     (2,842)    (2,842)
Issuance of share capital
 prior to the public offering  (511)                   184
Issuance of share capital
 and redeemable warrants
 in an initial public offering                        6,580
Issuance of share capital
 in respect of the in process
 research and development
 acquired from Z-NAX
 Communications Ltd.                                  1,894
Balance at Dec. 31, 1996         -       -1,843       9,229

CONTACT: BOS Better On-line Solutions, Ltd.

Israel Gal

972-4-999-0333

fax [phone]