1.

What is Material Non-Public Information?

a.

significant changes in sales volumes, market shares, product pricing or mix of sales

b.

acquisition or loss of a major contract

c.

changes in debt rates or analyst upgrades or downgrades of stock

d.

earnings and dividends

e.

major business acquisitions or dispositions

f.

financial, sales and other significant internal business forecasts

g.

significant changes in accounting treatment, write-offs or effective tax rate

h.

changes in top management

i.

stock split

2.

What is Prohibited?

a.

Prohibitions on Trading in Securities of Innodata:

i.

provide material non-public information to family members, business acquaintances, or friends;

ii.

recommend to anyone that they buy or sell stock while in the possession of material nonpublic information, even if the specific information is not disclosed to that person; or

iii.

disclose material non-public information to any employee who does not need to know the information to do his or her job.

b.

Prohibitions on Trading in Securities of Suppliers or Others Doing Business with Innodata: If a Covered Person obtains material non-public information concerning a supplier or other corporation doing business with the Innodata, the law considers them to be an insider of that supplier or corporation and, therefore, they may not purchase or sell securities of the supplier or corporation, or make trading recommendations to others. If this occurs, the Covered Person may be subject to all the penalties for insider trading described above. Covered Persons must always remember that information which may not be material to them may nevertheless be material to a supplier or other corporation.

c.

Other Prohibitions

i.

Short Sales. Short sales of Innodata’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in Innodata or its short-term prospects. In addition, short sales may reduce the seller’s incentive to improve Innodata’s performance. For these reasons, short sales by Covered Persons of Innodata securities are prohibited by this

ii.

Publicly Traded Options. A transaction in publicly-traded options is, in effect, a bet on the short-term movement of Innodata’s stock and therefore creates the appearance that the director or employee is trading based on inside information. Transactions in publiclytraded options also may focus the Covered Person’s attention on short-term performance at the expense of Innodata’s long-term objectives. Accordingly, transactions by Covered Persons in puts, calls or other derivative securities involving Innodata’s common stock, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”)

iii.

Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow a Covered Person to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the common stock. These transactions allow the employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the Covered Person may no longer have the same objectives as Innodata’s other shareholders. Therefore, such transactions by Covered Persons involving Innodata’s securities are prohibited by this Policy.

iv.

Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Innodata’s securities, Covered Persons are prohibited from holding Innodata securities in a margin account or pledging Innodata securities as collateral for a loan.

3.

Are There Valid Excuses for Insider Trading?

4.

Legal Penalties for Insider Trading:

1.

Who is Covered by this Policy?

2.

When May an Employee or Director Trade?

a.

If a Covered Person does not have material non-public information and is not management or a manager, the employee may trade Innodata stock at any time. Covered Persons possessing nonpublic information must use good judgement to determine whether the non-public information in their possession is material. The mere perception by a Covered Person’s friends or business colleagues that he or she traded on material non-public information could damage Innodata and the Covered Person’s reputation and expose him or her to potentially serious consequences. To avoid the perception of insider trading by others who may have the benefit of hindsight, Covered Persons should be very cautious when deciding whether they are in possession of material nonpublic information.

b.

If a Covered Person who is not management or a manger does not possess material non-public information, but because of the nature of their job they are sensitive to how others might judge their trading in Innodata stock, the safest time to trade in stock is during the “window” period. Even in a “window” period, however, employees cannot trade in stock if they possess material non-public information.

c.

Management, managers and directors must limit their trading to the window period. Even in a “window” period, however, management, managers and directors cannot trade in stock if they possess material non-public information

d.

Subject to the restrictions described herein, the “window” period is as follows:

e.

Employees and directors possessing material non-public information that becomes known to the investing public must wait until two business days after the date the information has been publicly released before they may buy or sell.

f.

Notwithstanding the above, the Company may close the window for all stock trades at any time that the Company deems it reasonably necessary to comply with SEC regulations.

1.

Directors and officers subject to Section 16 of the Exchange Act of 1934, whether or not in possession of material non-public information:

a.

must obtain pre-clearance from the General Counsel of Innodata prior to engaging in any transaction involving Innodata securities.

b.

are prohibited from purchasing Innodata stock within six months before or after a sale of Innodata stock (regardless of whether the purchase or the sale occurs first). For example: if you buy Innodata stock on January 15 and sell Innodata stock on April 15 it is prohibited. It is also prohibited to sell Innodata stock on January 15 if you have purchased Innodata stock within six months prior to January 15. This prohibition continues to apply post service as a director or officer with respect to purchases and sales of Innodata stock that took place within the six-month period prior to ceasing to be a director or officer.

i.

Stock issued upon the exercise of an option is generally not deemed to be a “purchase” for purposes of Section 16(b) of the Exchange Act.

c.

must comply with the requirements of Rule 144 of the Securities Act of 1933 in connection with sales of Innodata stock. This requirement continues to apply post service as a director or officer for a period of 90 days.

2.

As of the date of release of this Policy, the officers subject to Section 16 of the Exchange Act of 1934 are the CEO, CFO and COO.