Securities
and exchange commission
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 4)
(Rule 13d-101)
Under the Securities Exchange Act of 1934
Arotech
Corporation
(Name of Issuer)
Common
Stock, $0.01 par value per share
(Title of Class of Securities)
042682
20 3
(CUSIP Number)
Ephraim
Fields
Echo Lake Capital
888 Seventh Avenue, 17th Floor
New York, NY 10019
(212) 251-3381
(Name, Address and Telephone Number of
Person
Authorized to Receive Notices and Communications)
- with copies to-
|
Phillip M. Goldberg
Foley & Lardner LLP
321 North Clark Street
Suite 2800
Chicago, IL 60654-5313
(312) 832-4549 |
Peter D. Fetzer
Foley & Larder LLP
777 East Wisconsin Avenue
Suite 3800
Milwaukee, WI 53202-5306
(414) 297-5596 |
January
11, 2016
(Date of event which requires filing of
this statement)
If the filing person has previously filed
a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because
of Rule 13d-1(b)(3) or (4), check the following box. ☐
The information required in the remainder
of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the “Act”), or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act.
| CUSIP No. 042682 20 3 |
|
Page 1 of 9 Pages |
| 1 |
NAME OF REPORTING PERSON
Ephraim Fields |
|
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a) ☐
(b) ☐ |
| 3 |
SEC USE ONLY |
|
| 4 |
SOURCE OF FUNDS
PF |
|
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
☐ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
USA |
|
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH |
7 |
SOLE VOTING POWER
2,002,596 (includes 200,800 shares underlying sold-short put
options exercisable within 60 days hereof) |
|
| 8 |
SHARED VOTING POWER
0 |
|
| 9 |
SOLE DISPOSITIVE POWER
2,002,596 (includes 200,800 shares underlying sold-short put
options exercisable within 60 days hereof) |
|
| 10 |
SHARED DISPOSITIVE POWER
0 |
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,002,596 (includes 200,800 shares underlying sold-short put
options exercisable within 60 days hereof) |
|
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |
☐ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.1% |
|
| 14 |
TYPE OF REPORTING PERSON
IN |
|
| |
|
|
|
|
| CUSIP No. 042682 20 3 |
|
Page 2 of 9 Pages |
| 1 |
NAME OF REPORTING PERSON
Keith Rosenbloom |
|
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a) ☐
(b) ☐ |
| 3 |
SEC USE ONLY |
|
| 4 |
SOURCE OF FUNDS
PF/WC |
|
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
☐ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
USA |
|
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH |
7 |
SOLE VOTING POWER
337,251* |
|
| 8 |
SHARED VOTING POWER
0 |
|
| 9 |
SOLE DISPOSITIVE POWER
337,251* |
|
| 10 |
SHARED DISPOSITIVE POWER
0 |
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
337,251 |
|
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |
☐ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.4% |
|
| 14 |
TYPE OF REPORTING PERSON
IN |
|
| |
|
|
|
|
| * | As the sole Managing Member of Cruiser Capital Advisors, LLC, which acts as the investment advisor to pooled investment vehicles
(the “Cruiser Portfolios”) on a discretionary basis, he has the power to direct the affairs of Cruiser Capital
Advisors, LLC, which has sole voting and dispositive power over the 336,728 shares of Common Stock held on behalf of the Cruiser
Portfolios. Mr. Rosenbloom owns 523 Shares of record in his personal account. |
| CUSIP No. 042682 20 3 |
|
Page 3 of 9 Pages |
| 1 |
NAME OF REPORTING PERSON
Cruiser Capital Advisors, LLC |
|
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a) ☐
(b) ☐ |
| 3 |
SEC USE ONLY |
|
| 4 |
SOURCE OF FUNDS
WC |
|
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
☐ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware |
|
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH |
7 |
SOLE VOTING POWER
336,728 |
|
| 8 |
SHARED VOTING POWER
0 |
|
| 9 |
SOLE DISPOSITIVE POWER
336,728 |
|
| 10 |
SHARED DISPOSITIVE POWER |
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
336,728 |
|
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |
☐ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.4% |
|
| 14 |
TYPE OF REPORTING PERSON
OO |
|
| |
|
|
|
|
| CUSIP No. 042682 20 3 |
|
Page 4 of 9 Pages |
| 1 |
NAME OF REPORTING PERSON
Lawrence F. Hagenbuch |
|
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a) ☐
(b) ☐ |
| 3 |
SEC USE ONLY |
|
| 4 |
SOURCE OF FUNDS
N/A |
|
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
☐ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
USA |
|
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH |
7 |
SOLE VOTING POWER
0 |
|
| 8 |
SHARED VOTING POWER
0 |
|
| 9 |
SOLE DISPOSITIVE POWER
0 |
|
| 10 |
SHARED DISPOSITIVE POWER
0 |
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 |
|
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |
☐ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0% |
|
| 14 |
TYPE OF REPORTING PERSON
IN |
|
| |
|
|
|
|
| CUSIP No. 042682 20 3 |
|
Page 5 of 9 Pages |
AMENDED SCHEDULE 13D
This Fourth Amended Schedule
13D (this “Schedule 13D/A”) amends and restates the Schedule 13D initially filed with the Securities and Exchange
Commission and is being filed by Ephraim Fields and relates to common stock, par value $0.01 per share (the “Common Stock”)
of Arotech Corporation, a Delaware corporation (the “Company” or the “Issuer”).
Ephraim Fields expressly
disclaims beneficial ownership of securities held by Keith Rosenbloom, Cruiser Capital Advisors, LLC and Lawrence F. Hagenbuch.
The securities reported herein as being beneficially owned by Mr. Fields do not include any securities held by Mr. Rosenbloom,
Cruiser Capital Advisors, LLC or Mr. Hagenbuch.
By virtue of Keith Rosenbloom
and Lawrence F. Hagenbuch agreeing to serve as nominees for election to the Issuer’s Board of Directors in connection with
the nomination of director candidates by Ephraim Fields, Mr. Rosenbloom and Mr. Hagenbuch may be deemed to constitute a “group”
with Mr. Fields for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Mr. Rosenbloom and Mr. Hagenbuch expressly disclaim beneficial ownership of securities held by Mr. Fields and by each other. The
securities reported herein (if any) as being beneficially owned by Mr. Rosenbloom and Mr. Hagenbuch do not include any securities
held by each other or by Mr. Fields.
Item 1. Security and Issuer
| |
Securities acquired: |
Common Stock |
| |
|
|
| |
Issuer: |
Arotech Corporation
1229 Oak Valley Drive
Ann Arbor, Michigan 48108 |
Item 2. Identity and Background
(a) This Schedule
13D/A is filed by Ephraim Fields.
Each of the persons identified
in this Schedule 13D/A is referred to as a “Reporting Person” and, collectively, as the “Reporting Persons.”
Each of the Reporting Persons is a party to that certain Joint Filing Agreement attached hereto as Exhibit 1. While Keith
Rosenbloom and Lawrence F. Hagenbuch may be deemed to constitute a “group” with Ephraim Fields for purposes of Section
13(d)(3) of the Exchange Act, due to Mr. Rosenbloom and Mr. Hagenbuch agreeing to serve as nominees for election to the Issuer’s
Board of Directors in connection with the nomination of director candidates by Mr. Fields, neither Mr. Rosenbloom nor Mr. Hagenbuch
is, and will not become, a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance
to, Mr. Fields as to how he will, if elected as a director of the Issuer, act or vote on any issue or question.
| CUSIP No. 042682 20 3 |
|
Page 6 of 9 Pages |
The Reporting Persons
are filing this Schedule 13D/A jointly, as they may be considered a “group” under Section 13(d)(3) of the Act. However,
neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Reporting Persons that
such a group exists.
(b) The principal
place of business for Ephraim Fields is c/o Echo Lake Capital, 888 Seventh Avenue, 17th Floor, New York, NY 10019.
The principal place of
business for Keith Rosenbloom is c/o Cruiser Capital Advisors, LLC, 888 Seventh Avenue, 17th Floor, New York, NY 10019.
The principal place of
business for Lawrence F. Hagenbuch is 4309 Larchmont Ave., Dallas, TX 75205.
(c) Ephraim Fields
is the founder of Echo Lake Capital, a value-oriented investment firm focused on U.S. equities. His principal occupation is investing.
Keith Rosenbloom is the
Managing Member of Cruiser Capital Advisors, LLC, and he manages the Cruiser Portfolios. His principal occupation is investing.
Lawrence F. Hagenbuch
is the Chief Operating Officer and Chief Financial Officer for J. Hilburn, Inc.,
a custom clothier for men.
(d) During the last
five years, none of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last
five years, none of the Reporting Persons have been a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and, as a result of such proceeding, were or are subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Ephraim Fields,
Keith Rosenbloom and Lawrence F. Hagenbuch are each a citizen of the United States of America. Cruiser Capital Advisors, LLC is
organized under the laws of the State of Delaware.
Item 3. Source and Amount
of Funds
As of the date of this
Schedule 13D/A, Ephraim Fields had invested $4,153,288 (inclusive of brokerage commissions) in Common Stock of the Issuer. The
aggregate purchase price of the 200,800 shares Common Stock underlying certain sold-short put options that may be deemed to be
beneficially owned by Mr. Fields is approximately $316,240, assuming all such shares are purchased by Mr. Fields. The source of
these funds was personal investment capital.
As of the date of this
Schedule 13D/A, Keith Rosenbloom had invested $1,292 (inclusive of brokerage commissions) in Common Stock of the Issuer. The source
of these funds was personal investment capital.
As of the date of this
Schedule 13D/A, Cruiser Capital Advisors, LLC had invested $738,981 (inclusive of brokerage commissions) in Common Stock of the
Issuer. The source of these funds was working capital.
| CUSIP No. 042682 20 3 |
|
Page 7 of 9 Pages |
Item 4. Purpose of the Transaction
The Reporting Persons
purchased the Common Stock for investment purposes. Depending upon overall market conditions, other investment opportunities available
to the Reporting Persons, and the availability of shares at prices that would make the purchase or sale of Common Stock desirable,
each Reporting Person may endeavor to increase or decrease its position in the Issuer through, among other things, the purchase
or sale of Common Stock on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting
Person may deem advisable. Each Reporting Person may engage in short selling or hedging or similar transactions with respect to
the Common Stock, on such terms and at such times as the Reporting Person may deem advisable.
Except to the extent
discussed herein, the Reporting Persons do not have any present plan or proposal which would relate to or result in any of the
matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or
in connection with completion of, or following, any of the actions discussed herein. Each Reporting Person intends to review its
investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s
financial position and investment strategy, the price levels of the shares, conditions in the securities markets and general economic
and industry conditions, the Reporting Person may in the future take such actions with respect to its investment in the Issuer
as it deems appropriate including, without limitation, continuing to engage in communications with management and the Board of
the Issuer, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Person’s
investment, making other proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure
or operations of the Issuer, purchasing additional shares, selling some or all of its shares, engaging in short selling of or any
hedging or similar transaction with respect to the Common Stock, or changing its intention with respect to any and all matters
referred to in Item 4.
On December 10, 2015,
Ephraim Fields submitted notice to the Issuer of his intent to nominate Ephraim Fields, Keith Rosenbloom and Lawrence F. Hagenbuch
as nominees for election as directors, on the WHITE proxy card, at the Issuer’s 2016 Annual Stockholder Meeting. In addition,
Mr. Fields sent a letter to the Board of Directors discussing the reasons for submitting the nomination letter.
On January 11,
2016, Ephraim Fields sent a letter to the Board of the Issuer demanding, pursuant to Section 220 of the Delaware General Corporation
Law, the opportunity to inspect and make or receive copies of certain records of the Issuer relating to, among other things, the
names and address of the Issuer’s stockholders (the “Demand Letter”). The purpose of the Demand Letter
is to enable communications with fellow stockholders on matters relating to the stockholders’ common interests, including
the upcoming proxy contest. A copy of the letter to the Board is attached as Exhibit 1 hereto.
Item 5. Interest in Securities
of the Issuer
(a) - (b) Ephraim Fields
beneficially owns in the aggregate 2,002,596 shares of Common Stock (including 200,800 Shares underlying certain sold-short put
options), which represents approximately 8.1% of the Company’s outstanding shares of Common Stock. The percentage ownership
of shares of Common Stock set forth in this Statement is based on 24,697,335 shares of Common Stock issued and outstanding as of
August 6, 2015 as reported in the Company’s Form 10-Q filed with the SEC on August 11, 2015.
Ephraim Fields has the
sole power to vote or to direct the voting of all such shares described herein. Mr. Fields has the sole power to dispose
or direct the disposition of all such shares described herein. Mr. Fields does not have shared power to vote or to direct
the vote of any such shares described herein, and does not have shared power to dispose or direct the disposition of any such shares
described herein.
| CUSIP No. 042682 20 3 |
|
Page 8 of 9 Pages |
Keith Rosenbloom beneficially
owns in the aggregate 337,251 shares of Common Stock, which represents approximately 1.4% of the Company’s outstanding shares
of Common Stock. The percentage ownership of shares of Common Stock set forth in this Statement is based on 24,697,335 shares of
Common Stock issued and outstanding as of August 6, 2015 as reported in the Company’s Form 10-Q filed with the SEC on August
11, 2015.
Keith Rosenbloom is the
sole Managing Member of Cruiser Capital Advisors, LLC, which acts as the investment advisor to pooled investment vehicles (the
“Cruiser Portfolios”) on a discretionary basis. 336,728 of the shares of Common Stock that are beneficially
owned by Mr. Rosenbloom are held of record or beneficially by Cruiser Capital Advisors, LLC on behalf of the Cruiser Portfolios.
Because Mr. Rosenbloom is a Managing Member of Cruiser Capital Advisors, LLC, he has the power to direct the affairs of Cruiser
Capital Advisors, LLC, which has sole voting and dispositive power over the shares of Common Stock held on behalf of the Cruiser
Portfolios. Mr. Rosenbloom owns 523 Shares of record in his personal account.
Lawrence F. Hagenbuch
does not own any shares of Common Stock.
(c) Ephraim Fields
has not effected any transactions in shares of Common Stock since the filing of the last amendment to this Statement.
Keith Rosenbloom has
not effected any transactions in shares of Common Stock since the filing of the last amendment to this Statement.
Cruiser Capital Advisors,
LLC has not effected any transactions in shares of Common Stock since the filing of the last amendment to this Statement.
Lawrence F. Hagenbuch
has not effected any transactions in shares of Common Stock since the filing of the last amendment to this Statement.
(d) No person other
than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds
from the sale of, the Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements,
Understandings or Relationships with Respect to Securities of the Issuer
As previously disclosed,
Ephraim Fields has sold short in the over the counter market American-style put options, referencing 200,800 Shares, which have
an exercise price of $2.50 per share and expire on February 19, 2016.
With respect to the Cruiser
Portfolios, Cruiser Capital Advisors, LLC may be entitled to an allocation of a portion of profits, if any, and a management fee.
Keith Rosenbloom and
Lawrence F. Hagenbuch are indemnified by Ephraim Fields for liabilities they may incur in connection with the intended solicitation
of proxies for use at the 2016 Annual Meeting of Stockholders of the Issuer. Mr. Fields will also reimburse Messrs. Rosenbloom
and Hagenbuch for expenses that they reasonably incur in connection with the intended solicitation of proxies for use at the 2016
Annual Meeting of Stockholders of the Issuer. Neither Mr. Fields, Mr. Rosenbloom nor Mr. Hagenbuch is, and will not become, a party
to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, each other or any other
person as to how he, if elected as a director of the Issuer, will act or vote on any issue or question.
Other than the foregoing
agreements and arrangements, and the Joint Filing Agreement, there are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Issuer.
Item 7. Material to be Filed
as Exhibits
| |
Exhibit No. |
Description |
| |
|
|
| |
Exhibit 99.1 |
Demand Letter Dated January 11, 2016 |
| CUSIP No. 042682 20 3 |
|
Page 9 of 9 Pages |
SIGNATURES
After reasonable inquiry
and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated:
January 11, 2016
/s/ Ephraim Fields
Ephraim Fields
/s/ Keith Rosenbloom
Keith Rosenbloom
Cruiser Capital Advisors, LLC
By: /s/ Keith
Rosenbloom
Name: Keith Rosenbloom
Title: Managing
Member
/s/ Lawrence F.
Hagenbuch
Lawrence F. Hagenbuch
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule
13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of
them of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock, of Arotech Corporation,
and further agree that this Joint Filing Agreement shall be included as an Exhibit to such joint filings.
The undersigned further
agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto,
and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party
is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason
to believe that such information is inaccurate.
This Joint Filing Agreement
may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument.
IN WITNESS WHEREOF,
the undersigned have executed this Agreement as of January 11, 2016
/s/ Ephraim Fields
Ephraim Fields
/s/ Keith Rosenbloom
Keith Rosenbloom
Cruiser Capital Advisors, LLC
By: /s/ Keith
Rosenbloom
Name: Keith Rosenbloom
Title: Managing
Member
/s/ Lawrence F.
Hagenbuch
Lawrence F. Hagenbuch
Exhibit 99.1
January 11, 2016
CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND OVERNIGHT DELIVERY
Attention: Secretary of the Corporation,
Yaakov Har-Oz
Arotech Corporation
1229 Oak Valley Drive
Ann Arbor, Michigan 48108
| Re: | Access to Stockholder List and Demand to Inspect Stockholder
Records |
| | | Pursuant to Section
220 of the Delaware General Corporation Law |
Ladies and Gentlemen:
I, Ephraim Fields,
hereby certify to Arotech Corporation (the “Company”) that I am entitled to vote and beneficially own in the
aggregate 2,002,596 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”),
which includes 200,800 shares underlying certain sold-short put options. Pursuant to the Schedule 13D filed by me with the Securities
and Exchange Commission, as amended to date, I own approximately 8.1% of the total Common Stock outstanding. As documentary evidence
of my beneficial ownership, I am attaching an executed copy of the latest amendment to the Schedule 13D. I affirm that the documentary
evidence of ownership provided to the Company is a true and correct copy of what it purports to be.
Pursuant to Section
220 of the Delaware General Corporation Law, I hereby demand (the “Demand”) an opportunity for myself and my
duly authorized agents to inspect and to make copies and extracts from the following records and documents of the Company (the
“Demand Materials”):
1.
A complete record or list of the Company’s stockholders arranged in descending order by number of shares, certified
by its transfer agent(s) and/or registrar(s), setting forth the name and address of each stockholder and the number of shares of
Common Stock registered in the name of each such stockholder as of a current date and any record date for the 2016 Annual Meeting
of Stockholders of the Company or any postponement, rescheduling, adjournment or continuation thereof, or any other meeting of
stockholders held in lieu thereof the (the “Annual Meeting”) (each such date referenced above is hereinafter
referred to as a “Record Date”).
2.
A CD, DVD or other electronic storage medium containing a list of the Company’s stockholders setting forth the name
and addresses of each stockholder and number of shares of Common Stock registered in the name of each such stockholder as of any
Record Date, together with any computer processing information that may be relevant or necessary to make use of such electronic
medium, and a hard copy printout of such electronic medium for verification purposes.
3.
All daily transfer sheets showing changes in the lists of the Company’s stockholders referred to in Item 1 above which
are in or come into the possession of the Company.
4.
All information that is in, or that comes into the Company’s or its transfer agent’s possession or control,
or which can reasonably be obtained, pursuant to Rule 14b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), from brokers, dealers, banks, clearing agencies, voting trusts or nominees of any central certificate depository
system concerning the number and identity of, and the number of shares held by, the actual beneficial owners of the Common Stock,
including (a) the Securities Position Listing and omnibus proxy issued by The Depository Trust Company (“DTC”)
for any Record Date for the Annual Meeting; (b) all “Weekly Security Position Listing Daily Closing Balances” reports
issued by DTC (and authorization for my duly authorized agents to receive such reports directly); and (c) all lists (and computer
media, processing data and printouts as described in Item 2 above) containing the name, address and number of shares of Common
Stock attributable to any participant in any employee stock ownership, incentive, profit sharing, savings, retirement, stock option,
stock purchase, restricted stock, dividend reinvestment or other comparable plan of the Company in which the decision whether to
vote shares of Common Stock held by such plan is made, directly or indirectly, individually or collectively, by the participants
in the plan and the method(s) by which the stockholder or his agents may communicate with each such participant.
5.
All lists, tapes, electronic files and other information that are in, or that come into, the possession or control of the
Company, or that can reasonably be obtained, pursuant to Rules 14b-1 and 14b-2 under the Exchange Act, which set forth the names
and addresses of, and the number of shares held by, the beneficial owners of the Common Stock, including, but not limited to, any
list of non-objecting or consenting beneficial owners (“NOBO’s” or “COBO’s”)
in the format of a printout and magnetic computer tape listing in descending order balance.
6.
A “stop transfer” list or “stop lists” relating to any shares of the Common Stock as of the dates
of the lists referred to in Item 1 above.
7.
Any and all omnibus proxies and correspondent participant listings with respect to all nominees and respondent banks which
are currently in effect.
8.
The information and records specified in Items 1, 2, 4, 5, 6, and 7 above as of any Record Date for stockholder action set
by the Company’s Board of Directors, by operation of law or otherwise.
9.
A copy of the report prepared by the Inspector of Elections showing the names of the Company’s stockholders and how
such stockholders voted with respect to any matter(s) presented for consideration by the stockholders at the Company’s 2015
Annual Meeting of Stockholders held May 11, 2015.
I make this notification
and Demand to inspect, copy and make extracts of the Demand Materials in good faith and for the purpose of enabling myself to communicate
with the Company’s stockholders, in compliance with applicable law, with respect to matters relating to their interests as
stockholders, including, but not limited to, my solicitation of stockholders to vote for my director nominees at the Annual Meeting.
I note that it is well settled case law that a wish to communicate with other stockholders in the context of a proxy contest is
a proper purpose. Further, I note that all of my requests directly relate to my desire to communicate with other stockholders in
connection with the proxy contest, and it is generally recognized that in this context a stockholder is entitled to the same stockholder
lists and data as are available to the Company.
I expect the Company
to either deliver copies of the requested materials to myself or my duly authorized agents or representatives or make the materials
available during the Company’s regular business hours. I will forego the Demand for inspection if the Company voluntarily
furnishes to me or my duly authorized agents or representatives all the information included in the Demand Materials.
I will bear the reasonable
costs incurred by the Company (including those of its transfer agent(s)) in connection with the production of the information with
regard to which this Demand is made, including overnight delivery charges. Please advise my counsel, Phillip M. Goldberg of Foley
& Lardner LLP, 321 North Clark Street, Chicago, Illinois 60610 (telephone number: 312-832-4549), of the total costs and I will
provide you payment by overnight delivery.
Please advise Mr. Goldberg
as promptly as practicable as to the time and place that the items requested above will be made available in accordance with this
Demand. Please also advise such counsel immediately whether you voluntarily will supply the information requested by this Demand.
In addition, if the Company believes that this Demand is incomplete or otherwise deficient in any respect, please contact such
counsel immediately so that I may promptly address any alleged deficiencies.
If you refuse to permit
the inspection and copying demanded herein within five business days, I will conclude that this Demand has been refused and will
take appropriate steps to secure its rights to examine and copy the Demand Materials.
Please also be advised
that this Demand is not intended to constitute a request under Rule 14a-7 of the Exchange Act. I or my duly authorized agent may
make a request pursuant to Rule 14a-7 by separate communication to the Company.
I reserve the right
to withdraw or modify this Demand at any time, and to make other demands of the Company whether pursuant to the Delaware General
Corporation Law, other applicable law, or the Company’s Amended and Restated Certificate of Incorporation, as amended to
date, or Amended and Restated By-Laws.
Very truly
yours,
/s/
Ephraim Fields
Ephraim Fields
cc: Mr. Phillip Goldberg
Mr. Peter Fetzer
Arotech (NASDAQ:ARTX)
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