See Item 5. E. Taxation. (c) Encouragement of Capital Investments Law, 5719-1959 "On March 3, 2007, we received a pre-ruling from the Israeli Tax Authority for our request for a Benefiting Facility, regarding eligibility for benefits under the Amendment. Our income from this program is tax-exempt for a period of two years, and is subject to a reduced tax rate of 15%-25% for a period of five to eight years (depending upon the percentage of foreign ownership of the Company). We did not enjoy from tax benefits in this program yet."
Item 5. Income Taxes "Our subsidiaries in the United States and the United Kingdom have estimated total available carry-forward tax losses of $9.8 million and $0.9 million, respectively that may be used as an offset against future taxable profit for 16-20 years and an indefinite period, respectively. As of December 31, 2006, we recorded a full valuation allowance of our subsidiaries’ tax assets due to the uncertainty of their future realization. "