1. Deloitte - Canada/Israel
A New Direction
• Elliott Jacobson, Partner, Toronto
• John Muffolini, Partner, Toronto

2. Deloitte - Canada
• Deloitte Canada is part of Deloitte Touche Tohmatsu, one of the largest privately-held professional
services firm in the world.
• Expansive Professional Services – Deloitte is a
highly successful, broad-based advisory firm
offering an integrated approach to consulting,
transaction and professional services to leading
organizations around the world.
• People – Deloitte and its affiliates employ more
than 150,000 professionals in 140 countries
worldwide.
• Size – Deloitte and its affiliates generated global
revenue of over US$23 billion in FY2007.
• Recognition – Deloitte has been recognized as the
top performer of the Big Four over the past six years $1.4
Revenue
based on net revenue growth. This recognition has Billion
been achieved due to an unwavering commitment to
client service and integrity. Total People 7,783
• Industry Expertise – Deloitte is a recognized Partners 546
leader in providing services to clients in nearly all
Professional Staff 5,411
industries. The Firm is noted for its authorship of
many industry publications/studies and for its Locations 57
involvement in many industry trade associations.
1 © Deloitte & Touche LLP and affiliated entities.

3. Deloitte - Canada
• Largest Public Accounting Firm in Canada
• Deloitte Audits 444 of TSX/TSX-V Companies
• Deloitte Audits - 18 of TSX “Top 60”
• Deloitte Audits/Provides Services - 65 of “TSX 100”
• Technology, Media, Telecommunication Leaders
• Fast 50
• Predictions
2 © Deloitte & Touche LLP and affiliated entities.

4. Deloitte - Canada
• Being Public on TSX
– Accounting – IFRS - January 2011
– Now can use
– Audit – Canadian GAAS → Now ISA
– Auditor – Registered with Canadian Public Accountability Board
(“CPAB”)
– Interim Reporting
• 90/120 days after Year-end
• 60 days after quarter – No auditor review required
– No Sarbanes-Oxley (“SoX-404”) Audit Report on Internal Controls
3 © Deloitte & Touche LLP and affiliated entities.

5. Deloitte – Canada
Financial Reporting
• New Listing
– IPO – 3 years Audited [Canadian/International Auditing Standards
Canadian GAAP or IFRS US GAAP – [Reconciled]
– Capital Pool Corporation (“CPC”) – 3 (or 2) Years Audited
– CEO / CFO - Certification
- No SoX-404 Opinion
• Ongoing
– Quarterly Financials
– Reduced Notes
– No Review requirement
– Acquisitions - Filing of information
- Pro-forma financial statements (No report)
- Audited Statements of Target
4 © Deloitte & Touche LLP and affiliated entities.

6. Deloitte - Canada
• Audit Committees
• TSX
– All independent
– All Financially “Literate”
• TSX-V
– Majority Independent
5 © Deloitte & Touche LLP and affiliated entities.

7. Entrepreneurial/Emerging Companies
A New Direction – Making the Connection between Israel and Canada…..
We can provide assistance to Israeli companies looking for “gateway” to the Canadian
market:
• Audit services for Israeli companies accessing Canadian Capital Markets
• Strategy – entry or expansion strategy, market assessment, enterprise value mapping
• Structure – business vehicle planning, tax and organizational structure guidance,
operational and supply chain assistance
• Location – site selection, manufacturing and supply chain process migration
• Implementation – people and process
• Mergers & acquisitions – target evaluation and selection, due diligence, M&A assistance
• Tax planning for Israeli Shareholders
www.deloitte.ca
6 © Deloitte & Touche LLP and affiliated entities.

8. Deloitte Toronto Entrepreneurial Public Company Services
• Specializing in Mid-Market Companies
• Audit and Tax Services
• A Dedicated Service Group
• Broad Range of Experience in:
– “Green Tech”
– Technology
– Manufacturing
– Resources
7 © Deloitte & Touche LLP and affiliated entities.

9. Deloitte Toronto Entrepreneurial Public Company Services
• Close relationship with Deloitte, Israel
• Clients on:
• TSX
• TSX-V
• Experience in CPC Transactions
• Experience in IPO Transactions
• Comfortable/Experienced with Entrepreneurial Clients
• World-wide Client base
• Joint [Canada/Israel] engagement teams
8 © Deloitte & Touche LLP and affiliated entities.

10. Services for Emerging Israeli Companies
• Audits of OPCO’S – using joint audit team
• Audits of CPC’s
• Restructuring Advice and Assistance
• Reorganization of Israeli Companies
• Canadian Tax Compliance
• International Tax Compliance
• Israel Tax Compliance
• Securities Filing Assistance [Prospectuses, Qualifying Transactions etc.]
• Working Relationships with Yigal Arnon, Miller Thomson, Mackie Research Capital, TSX
9 © Deloitte & Touche LLP and affiliated entities.

12. Deloitte Israel
3600 thinking

13. The Israeli Firm: Deloitte Brightman Almagor Zohar
• Deloitte Brightman Almagor Zohar is one of the leading accounting and consulting
firms in Israel.
• Approximately 70 partners and directors and more than 1000 employees serve
domestic and international clients, public institutions and promising fast-growth
companies whose shares are traded on the Israeli, US and European capital
markets.
• The firm provides a wide range of services to private companies and over 150
public companies in diversified sectors.
• The firm serves 41% of the top 100 companies in Tel-Aviv stock exchange.
• The firm advised and escorted more than 40 companies with IPO’s during 2006-
2007.
• The firm has Six Offices throughout The country:
• Tel Aviv (National Office)
• Ramat-Gan
• Haifa
• Jerusalem
• Beer-Sheba
• Eilat
© Deloitte & Touche LLP and affiliated entities.

14. The Israeli VC Indicator Survey
To keep ahead of industry trends, we regularly publish thought leadership
publications that help our clients understand this ever-changing industry.
The VC Survey is a Deloitte initiative, which is conducted on a quarterly basis
concurrently in Israel. The purpose of the Israel VC Indicator is to identify trends
within the venture capital arena. Its objective is to give a comprehensive picture
of the expectations of the Israel VC community for the next six to twelve months.
The survey is designed to explore relevant key aspects, such as the economic
and market climate, deal activity and investment and managerial focus.
© Deloitte & Touche LLP and affiliated entities.

15. Technology Fast 50
The Deloitte Technology Fast 50, one of the
Israel's foremost technology award programs,
is a ranking of the country's 50 fastest-
growing technology companies based on
percentage growth over five years.
The Fast 50 program honors business
growth, technological innovation and Israel
entrepreneurial spirit.
The Technology Fast 50 is part of a national
and international program run by Deloitte.
Qualifying entrants of the Israel Fast 50
program will be put forward to the EMEA Fast
500 (Europe, Middle East & Africa), along
with entrants from other national programs
run by Deloitte in the EMEA region.
© Deloitte & Touche LLP and affiliated entities.

16. Raising Capital in Canada
IPO on the Toronto Stock Exchange
Israeli Tax Main Considerations
Yitzchak Chikorel, CPA
Head of International Taxation services
February 2010

17. Reverse Merger
• Reverse merging into an existing Canadian public company- solution for
entering the public life and raising development capital for any private
company.
Receiving Israeli Shareholders
Canadian Company
Existing Canadian public
company
Transfer Israel Co
© Deloitte & Touche LLP and affiliated entities.

18. Reverse Merger - Tax event
Reverse merger is considered as a sale of the transferred company’s
shares and therefore may trigger capital gains tax.
The gains will be determined based on the cost and the current value of the
transferred company. The current value may be determined based on the PO
price.
© Deloitte & Touche LLP and affiliated entities.

19. Encouragement Law
• The general benefited tax rate of an approved enterprise is 25%.
• The benefited tax rate may be further reduced corresponding to the increase of
the foreign ownership percentage, as follows:
Foreign ownership Reduced tax rate
0% - 49% 25%
49% - 74% 20%
74% - 90% 15%
90% - 100% 10%
18 © Deloitte & Touche LLP and affiliated entities.

20. Encouragement Law (Cont.)
The Ireland Track- relevant only to enterprises located in Priority Zone A.
Flat corporate tax rate 11.5%
Dividends WHT to a foreign resident 4.5%
Dividends WHT to an Israeli resident
15%
19 © Deloitte & Touche LLP and affiliated entities.

21. Employee Stock Options
Section 102 allows employees to be taxed at capital gains tax rates of
25% at the date of realization of the shares (including options), provided
that all the following conditions are met:
the employee owns or as a result of the exercise of the granted options
may own, less than 10% of rights to the Company;
the plan has received advance approval from the ITA;
the appointment of an ITA approved trustee who may be either a
company employee or an external appointment;
a minimum trustee retention period of 24 months from the date on which
the options were granted and deposited with the trustee.
The company will not be permitted to deduct an expense with respect to
the gain or benefit realized.
Where the shares are publicly traded on the grant date, or where registered
for trading within 90 days thereafter any benefit accruing at the date of
grant will be subject to tax upon the realization of the securities as
employment income. The remainder benefit will be subject to tax as capital
gains. © Deloitte & Touche LLP and affiliated entities.

22. Miscellaneous
In case of approved enterprise pre-approval from the Investment Center
is required. In case of benefited enterprise (only since 2006) there is no
need for pre-approval.
In case the Israeli Company received grants from the Israeli Office of
the Chief Scientist (OCS), pre-approval needs to be obtained.
© Deloitte & Touche LLP and affiliated entities.

23. Tax Deferral
103T 104H Notes
Classification Merger Sale
Tax deferral Sale of the merged company’s 50% - 2 years after
shares the sale.
50%- 4 years after
the sale.
Pre-approval 60 days prior to the merger date 30 days prior to the
sale date
Economic Economic reasons are required – NA According to previous rulings
reasoning both companies should maintain merger with existing public
their business activities for 2 shell may be considered as
years an economic reason.
Holding limitation 2 years minimum holding NA (*) Permitted “Change in
–the transferred limitation in which no permitted rights” up to 49% is certain
company “change in the rights” of the cases. (Less than 10% as a
original shareholders – except sale; up to 25% as a private
for pre-merger non-controlling issuance; or pursuant to section
102 of the ITO)
shareholders (%< 5%) of traded
rights (*)
Holding limitation See above Holding by a See above
– trustee for the tax-
in the absorbing deferral duration
company
© Deloitte & Touche LLP and affiliated entities.

24. Tax Deferral (Cont.)
103T 104H Notes
Losses offset No restrictions No restrictions Business and
capital losses
Consecutiveness The absorbing company The absorbing company viewed Specific
viewed as the original as the original shareholders calculations
shareholders (cost base, (cost base, Purchase date etc.). methods apply in
Purchase date etc.) certain cases.
Value ratio Ratio of no more than 1/9 NA relief may be
granted in case of
existing public
companies
Issuance ratio Issuance ratio based on pre- Issuance ratio based on pre-
merger market value of each merger market value of each
participating company. participating company.
Only one type of shares. Only one type of shares.
Cash No cash consideration Cash consideration may be
consideration paid in specific cases
© Deloitte & Touche LLP and affiliated entities.

25. Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and
independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
© Deloitte & Touche LLP and affiliated entities.