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              &lt;font style="font-size: 10pt; font-family: Times New Roman, Times, serif;"&gt;&lt;strong&gt;NOTE

              7:-&lt;/strong&gt;&lt;/font&gt;

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      &lt;font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"&gt;On

      June 16, 2011 the Company has acquired 1,136,666 shares of

      Telkoor, a major shareholder of the Company and an Israeli

      company listed in the Tel Aviv stock exchange, which

      represents 8.8% of the outstanding shares of Telkoor. As a

      result of this transaction, an existing manufacturing

      agreement between Digital Power and Telkoor will be updated

      and extended. The investment is accounted for as

      available-for-sale security. In September 2012, the

      investment has been accounted for under cost method as

      Telkoor shares do not have readily determinable fair value on

      the Tel Aviv Stock Exchange. The Company evaluated the fair

      value of the investment with assistance of a third party

      valuation. Other than temporary impairment loss of $218 was

      recognized in finance expenses in the quarter ended September

      30, 2012. The fair value of the investment as of December 31,

      2012 was $780. The Company obtained another third party

      evaluation of the stock during the quarter ended June 30,

      2013 and recognized the fair value of the investments to be

      $505,000. The Company recorded an impairment loss of $196,000

      during the quarter and six months ended June 30, 2013. The

      Company has evaluated the near-term prospects of the

      investment in relation to the severity and duration of the

      impairment and based on that evaluation has the ability and

      intent to hold these investments until a recovery of fair

      value. Company has two reportable geographic segments (see

      Note 1 for a brief description of the Company's

      business).&lt;/font&gt;

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