Margin Disclosure

The Margin Disclosure Statement is intended to provide some basic facts about purchasing securities on margin and to alert you to the risks involved with trading securities in a margin account. Before trading securities in a margin account, it is important to carefully review the Margin Agreement provided by Bonds.com, Inc. or its clearing firm, Pershing LLC ("Pershing"), and to consult with Bonds.com, Inc. regarding any questions or concerns you may have regarding margin accounts. When you purchase securities, you have the option of paying for them in full or borrowing part of the purchase price from Pershing. If you choose to borrow funds from Pershing, you will need to open a margin account with Pershing through Bonds.com. The securities purchased are used as collateral for the loan that was made to you. If the securities in your brokerage account decline in value, so does the value of the collateral supporting your loan. As a result, Bonds.com, Inc. or Pershing can take action. For instance, Bonds.com, Inc. or Pershing can issue a margin call and/or sell securities or liquidate other assets in any of your brokerage accounts held with Bonds.com, Inc. or Pershing, in order to maintain the required equity in the margin account. It is important that you fully understand the risks involved in trading securities on margin. These risks include the following:

You can lose more funds than you deposit in the margin account

A decline in the value of securities that are purchased on margin may require you to provide additional funds to Pershing to avoid the forced sale of those securities or other securities or assets in your account(s).