Going Public in the Canadian Capital Markets

1. Going Public in the Canadian Capital Markets Daniel Bloch November 22, 2011

2. Aird & Berlis LLP • Aird & Berlis LLP is a Toronto Canada based full service law firm with over 75 years of experience offering Canadian legal services • The firm is well positioned to be the gateway to Canada for non-Canadians wishing access to the Canadian capital markets

3. Canada’s Competitive Strengths • Strong Capital Markets: • Canada has been ranked the soundest financial system for 3 consecutive years • Canada is the market of choice for resource companies • Canada’s capital markets provide earlier access to US capital without the higher cost of regulatory compliance • Canada has a strong culture, well versed in equity investments

4. Canada’s Competitive Strengths (Cont’d) 2. Natural Resource Wealth: • Canada is the world’s largest producer of Zinc and Uranium • Canada is a major producer of gold, nickel, aluminum and lead • Canada has the largest oil reserves in the world after Saudi Arabia

5. Toronto Stock Exchange (“TSX”) andTSX Venture Exchange (“TSXV”) (as of December 31, 2010) • Total financings in 2010 amounted to $54B • Value of stocks traded in 2010 was $1.4T • 524 going public events • More listed issuers than any exchange in North America. 3670 listed issuers in total • 2nd highest number of listed issuers globally • 318 listed issuers with no connection to Canada other than their listing • Many additional issuers with no connection to Canada other than being a Canadian incorporated corporation

6. TSX and TSXV: Global Leaders in Mining (as of December 31, 2010) • Most listed mining issuers in the world, totalling 1531 issuers (58% of the world’s public mining companies) • Raised $17.8B through over 2400 financings in 2010 (60% of the world’s mining equity capital)

7. Mining (Con’t) • 50% of the 9,500 mineral exploration projects held by TSX and TSXV companies are outside of Canada • Over 200 analysts cover listed mining issuers • In the past 10 years, 80% of the total global number and 36% of the total global value of mining financings have been completed on the TSX and TSXV

8. Diversified Mining Exchanges • The TSX and TSXV provide superior access to capital for junior explorers, while concurrently listing some of the world’s largest mining companies, including:

9. TSX and TSXV: Leading Marketplace for Oil & Gas (as of December 31, 2010) • More oil & gas listings than any other public marketplace, totalling 394 issuers • $11.3B oil & gas equity raised through 504 financings • 55 new oil & gas listings in 2010 • Exchanges home to 35% of the world’s public oil & gas companies • Large and experienced analyst community • High graduation potential from TSX to TSXV • Tailored and flexible listing criteria to accommodate junior issuers

10. TSX & TSXV:Global Leaders in Technology (as of December 31, 2010 and first 6 months of 2011) • 2nd in North America for number of listed technology companies in 2010, totalling 182 issuers • $378M of equity capital raised through 101 financings in 2010 • 54 financings completed in first half of 2011 • 13 new listings in 2010 and 6 in the first half of 2011 • Active institutional investor community • Great visibility and analyst coverage • Good graduation potential from TSX to TSXV

11. Superior Analyst Coverage • The top 10 tech companies set out in this chart get covered by an average of 14 analysts. Nasdaq technology companies between $500M-$5B market cap get covered by an average of 11 analysts

12. Canadian Corporations • Although not required, international issuers may incorporate a Canadian corporation to list on the TSX or the TSXV • A Canadian corporation may be used to provide investor confidence in shareholder rights and corporate governance

13. Methods of Going Public • Initial Public Offering (“IPO”) • An IPO involves the issuer filing of a prospectus with one or more Canadian securities commissions • Issuers must complete a listing application to have shares listed on the TSX or TSXV

14. Methods of Going Public (Cont’d) 2. Reverse Takeover (“RTO”) • An RTO involves having a private company sell its shares (or in theory) assets into a TSX or TSXV listed shell company • The private company shareholders would then become the majority shareholders of the TSX or TSXV listed shell company

15. Methods of Going Public (Cont’d) 3. Qualifying Transaction (“QT”) • Capital Pool Companies (“CPC”) are exclusive to the TSXV • A CPC may raise between CDN $200,000 and CDN $5,000,000 • Proceeds are then targeted toward completing a QT by merging with or acquiring an operating company or assets within 24 months of listing

16. Methods of Going Public (Cont’d) • In Canada, a Special Purpose Acquisition Corporation (“SPAC”) offers an alternative vehicle for listing on the TSX • A SPAC allows the public to invest in companies or industry sectors normally sought by private equity firms • Two step process: • 1) A SPAC is initially listed as a non-operating cash entity. Must raise a minimum of CDN $30 million • 2) Proceeds are then targeted toward the acquisition of an operating company or assets within 36 months of listing (a “Qualifying Acquisition”)

17. Shareholders: Going Public Obligations • In “going public”, escrow requirements may be imposed on: • certain members of management • directors • promoters • significant (i.e. 10% and 20%) shareholders • in certain circumstances, spouses of the foregoing

18. Shareholders: Going Public Obligations (Cont’d) • Escrow periods range: 18 months to 3 years • Securities held in escrow are released in prescribed percentages over the escrow period • Transfers of securities before the escrow expires are generally not permitted • Escrow securities may be pledged to a financial institution as collateral for a loan

19. Securities Regulation: Corporate Governance • Good corporate governance is a theme that runs throughout all aspects of securities regulation • Common governance themes include: • Independence: board & committee • Qualifications & Competency: financial literacy and director education • Disclosure: timeliness, governance policies, shareholder approval of stock option plans, certificates and DC&P • Liability: more time and more money

20. Securities Regulation Comparison: Canada / United States / Israel • Regulatory Overview - Canada • Securities Regulation is managed through laws established by Canada's 13 provincial and territorial governments • Provincial/Territorial regulators work together to harmonize regulation through the Canadian Securities Administrators (CSA) • TSX and TSXV rules and policies govern conduct of issuers • Self-regulatory organizations, such as Investment Industry Regulatory Organization of Canada (IIROC), assist in regulating the market

21. Securities Regulation Comparison (Cont’d) 2. Regulatory Overview - United States • Securities regulation is governed by both federal and state-level regulation • The primary federal regulator is the SEC • Also regulated by various exchanges and self-regulatory organizations such as FINRA • Securities regulation is impacted by the Sarbanes-Oxley Act (“SOX”)

22. Securities Regulation Comparison (Cont’d) • 3. Regulatory Overview - Israel • החוקים הינם מדינתיים. החוקים המרכזיים: חוק החברות, התשנ"ט-1999 וחוק ניירות ערך, התשכ"חח-1968 והתקנות שהותקנו מכוחם. • הרגולטור הינו הרשות לניירות ערך (the ISA). • בנוסף, ישנם את הכללים הקבועים בתקנון הבורסה לניירות ערך בתל אביב בע"מ.

23. 1. Composition of the Board of Directors

24. 2. Code of Ethics

25. 3. Audit Committees

26. 4. Financial Disclosure Obligations

27. 5. Certification Obligations

28. 6. Internal Control over Financial Reporting (“ICFR”)

29. 7. Insider Reporting Obligations

30. 8. Related Party Transactions

31. Related Party Transactions (Cont’d)

32. Continuous Disclosure • Continuous disclosure is the backbone of securities law in Canada • Helps convey important information (timely and periodic) about reporting issuers to shareholders and the market • Gives equal access to all investors and creates and maintains market confidence • Forms a key element of the short form prospectus system • Regulated by NI 51-102

33. Timely Disclosure • Disclosure by listed issuers is required forthwith upon a material change or change of material fact • Persons (including insiders) are not permitted to trade if they are aware of an undisclosed material change or undisclosed change of material fact • If a material change occurs, the issuer must file a news release on a timely basis and a material change report within 10 days

34. Timely Disclosure (Cont’d) • Matters likely requiring disclosure include: 1) Change in Corporate Structure • changes in share ownership that may affect control • major reorganizations, amalgamations, or mergers • take-over bids, issuer bids, or insider bids 2) Change in Capital Structure • the public or private sale of additional securities • planned repurchases or redemption of securities • planned splits of common shares or offerings of warrants or rights to buy shares • any share consolidation, share exchange, or stock dividend

35. Timely Disclosure (Cont’d) 3) Change in Financial Results • a significant increase or decrease in near-term earnings prospects • unexpected changes in the financial results for any period • shifts in financial circumstances, such as cash flow reductions, major asset write-offs or write-downs • changes in the value or composition of the company’s assets • any material change in the company’s accounting policy 4) Change in Business and Operations • any development that affects the company’s resources, technology, products or markets • a significant change in capital investment plans or corporate objectives

36. Periodic Disclosure • Periodic disclosure obligations include: 1) Annual financial statements 2) Interim financial statements 3) Management Discussion and Analysis 4) Business Acquisition Reports 5) Annual Information Form 6) Proxy solicitation and information circulars

37. NI 43-101: Disclosure for Mineral Projects • NI 43-101 governs the reporting and display of information related to mineral properties owned by, or explored by, Canadian listed issuers • TSX and TSXV also have additional requirements for listed mining issuers

38. NI 43-101 (Cont’d) • NI 43-101: 1) requires that all oral or written disclosure of scientific or technical information be based upon information prepared by or under the supervision of a qualified person or approved by a qualified person 2) requires the use of standardized terminology and definitions 3) prescribes the framework and outline that all technical reports must satisfy

39. NI 43-101 (Cont’d) 4) requires a technical report to be filed within certain time periods for each mineral property material to the issuer • The purpose of the report is to support scientific or technical information contained in various public disclosure documents. • NI 43-101 prohibits certain disclosure (e.g. quantity, grade or metal or mineral content of a deposit that has not been categorized in an acceptable category)

40. NI-51-101:Disclosure for Oil & Gas Activities • NI 51-101 requires that a reporting issuer: 1) File a “Statement of Reserves Data” with the commission. The disclosure of this data is subject to very specific requirements • The standards and terminology set out in 51-101 are globally recognized 2) File a report of an independent qualified reserves evaluator or auditor who must have evaluated at least 75% of the future net reserves and reviewed the balance

41. NI-51-101 (Cont’d) 3) File a “Report of Management and Directors” confirming compliance with disclosure obligations 4) Make information readily available to the evaluator/auditor • The board must review procedures relating to information disclosure, the appointment of the evaluator and the statement of reserves filing • The board may delegate its responsibilities to a reserves committee

42. Questions

43. Thank You Name: Daniel Bloch Title: Partner T 1.416. 865.4739 F 1.416.863.1515 E dbloch@airdberlis.com Israel Cell: 054 9703299