Client intro presentation 27032016

Introducing

London AIM Advisory Services Listing Israeli Companies on AIM

Serving you, the Client

© Mark Reichenberg 2016 1

Who are London AIM Advisory Services?

Arising from some unsuccessful attempts at Admission, along with some significant failures subsequent thereto, it has become obvious that not all Israeli companies that have been presented and marketed for a listing on AIM have been suitable, with a sometimes large gap existing between the perceived suitability for listing of the company and the reality. This has resulted in aborted transactions and substantial declines in market capitalisation post Admission.

As a qualified Chartered Accountant (CA)SA from South Africa I am a highly experienced corporate and financial executive from a qualified professional, financial and listed company background with over 20 years of international experience in Finance, Operations, Business Development, Strategy and Company Leadership.

Along with demonstrable knowledge of and experience in the entire IPO process, coupled with the ability to assess and quickly understand a clients business and business fundamentals, my goal is to ensure that companies presented to the Broker community are not only viable candidates for listing, but that from the inception of the introduction all material and relevant facts are disclosed.

I aim to ensure that only “quality” clients are presented as candidates for listing. It is my intention that not only are the goals of my client and UK investment community achieved, but that my professionalism and integrity are not compromised in the process.

I lay it on the table for you. My intention is that when you pursue Admission, there are no unexpected material surprises!


Why London AIM Advisory?

Having extensive in-depth knowledge and “hands on” experience through the entire IPO process for AIM, I assist you in the process from the initial concept stage of pursuing an IPO through to the final admission date of your company on AIM.

With an open door to all the top Brokers and Nomads (including UK Legal Advisers), LAA can introduce your Company, allowing you to find the ‘best fit’ team for your Company and management to work with.

I can help ensure that the significant cost and effort of all parties has a substantially greater chance of a successful Admission. Furthermore, by partnering with quality Brokers and Nomads (including UK Legal Advisers, Financial PR and other service providers), it allows the company to find the ‘best fit’ team for the Company and management to work with.

Currently, “Introducers” do not all present the full picture. We provide a viable, practical, and full outline when considering a listing on the London AIM. The result of such a complete picture is that we will also eliminate the unexpected surprises, workload, complications and costs that management and Boards often uncover deep in the process.

At London AIM Advisory Services we act as your local hands-on “IPO Manager”, going well beyond the role of an “Introducer”. We assess the Company for suitability; inform management of ALL the steps and processes from inception to listing and what follows post listing, explain about all the parties involved and the anticipated costs.

My commitment to you is a professional and personal service. I do not take on any and every possible client thus ensuring that I always have more than enough time, as and when required, for you, the client.


Why List? Pros & Cons

PROS Effective way to fund Company current

growth and development plan. Access to capital for growth and provides

a liquid currency for growth and acquisition (i.e. shares as consideration)

Offers an opportunity for investors to realise some or all of their initial investment.

Creates an objective market value. Boosts employee motivation by creating

opportunities for equity based incentive schemes.

Less onerous reporting requirements Heightened public profile of the

company, stemming from increased press coverage and analysts’ reports.

Enhanced company status with customers and suppliers.

CONS x Susceptibility to market conditions x A potential loss of control as certain

decisions, notably around significant acquisitions, require prior shareholder approval.

x Increased responsibilities, governance and duties for the directors.

x Increased compliance, disclosure and reporting requirements.

x Loss of privacy because of additional reporting and disclosure requirements and greater accountability to shareholders

x Heightened public profile of the company, stemming from increased press coverage and analysts’ reports (pro - manageable).

x Operate in the public eye with all material events of the business having to be reported on as and when they happen


Why AIM?

• In recent years, flotation’s on AIM have grown in popularity. Since its launch in 1995, over 2,400 companies have joined AIM, raising more than £30bn collectively. Today, AIM attracts a range of dynamic companies from venture capital-backed businesses to more established growing organisations. AIM is open to organisations from all sectors all over the world.

• With a business day that begins before Tokyo closes and continues well into New York trading time,

AIM’s London location offers a convenient time zone for many European, US, Middle Eastern and Far Eastern companies to conduct business. The same article from Globes⁽ⁱ⁾ notes one CEO surveyed as saying “But if you compare to New York - in terms of the distance, the road show you need to go through, and the figures that the Nasdaq requires - it is fairly hellish there (New York), from this perspective...”

• One panelist involved in the conference highlighted in the Globes⁽ⁱ⁾ article noted “In light of the fantastic

2014, we see interest from many British investors,” and expressed hope that London would improve its IPO rate relative to New York this year. “The market in London is not less impressive than the market in New York, in terms of size or sophistication, and even exceeds it in terms of international exposure (the US stock market naturally focuses on US companies)”

• So what is the London Market looking for? To quote the Globes⁽ⁱ⁾ article, “They are looking for integrity,

organisation, good company management, no crazy yields, and no scandals..” • Simple admission process ⁽ⁱ⁾= “London Stock Exchange courts Israeli Cos” (Globes 23/03/2015 Hila Sion)


What are the main differences between AIM and the Main Market?


AIM Main Market

Minimum public float No requirements for shares to be held in public hands Minimum 25 % shares to be held in public hands in one or more EEA

States

Market capitalisation None (in reality at least £10m and ideally £20m or more) £700,000 (in reality at least £100m and ideally £200m or more)

Trading History No trading record requirement. Normally three-year trading record and audited accounts required.

Offering Document

Offering document on IPO does not generally require approval

of the regulators, unless IPO is being undertaken in conjunction

with an “offer to the public” (Prospectus)

Offering document on IPO approved by the FCA (or competent

authority in issuer’s home member state, where not the UK).

Accounting Standards IFRS or US, Canadian, Japanese or Australian GAAP IFRS or equivalent

Shareholder approval for

transactions

No prior shareholder approval required (other than for reverse

takeovers).

Prior shareholder approval required for substantial acquisitions and

disposals.

Other conditions for listing The company's shares must be freely transferable and eligible

for electronic settlement

At least 75% of the company's business must be supported by a

historic revenue earning record covering the last 3 financial years

The company must control and have controlled its assets for the last

3 financial years

The company’s main activity must be an independent business

The company's shares must be freely transferable and eligible for

electronic settlement

Primary adviser Nominated adviser required at all times. Sponsor required for IPO and certain transactions.

Cost of listing Minimum: £250,000 - £300,000. Typically 7-10% of funds raised Minimum: £700,000 - £900,000. Typically 7-10% of funds raised

Ongoing costs

Lower fees for nomads, auditors, lawyers and non-executive

directors in view of lesser continuing obligations. Typical cost of

maintaining listing is £100,000 - £200,000 p.a.

Higher fees for sponsors, auditors, lawyers and non-executive directors

in view of greater continuing obligations. Typical cost of maintaining

listing is £300,000 - £400,000 p.a.

Lock in requirements One year in practice for most AIM companies None in theory, but in practice at least six months

Announce half year results Within 3 months of half year end Within 2 months of the half year end

Publication of full year accounts Within 6 months of year end Within 4 months of the end of the financial year

Number of independent non-

executive directors (excluding the

Chairman of the board)

Two Three

The roadmap to an IPO

Phase 1:

Strategic

review. Is an

IPO the right

route?

Phase 2:

Preparing the

Company &

investment

case for

Brokers

Phase 3:

External Validation

● Nomad /Broker

● Legal

Phase 4:

Due diligence &

Financial PR

Phase 5:

Investor Note &

Admission Document

Phase 6:

Marketing


What does London AIM Advisory do for you?

• I rationally assess a clients suitability for an AIM listing before approaching the Broker community in the UK, ensuring that the client is a suitable candidate and prepared for presentation to the Brokers to pursue the Admission process

• I attempt to ensure full disclosure of all events, issues and possible corporate hurdles the client may have, for example:

Current or anticipated litigation. Off Balance Sheet encumbrances, liens, financial arrangements or events that could materially effect future

earnings. Any current or proposed directors that may have qualification issues in being a director of an AIM company. Patent, trademark or IP infringements or potential infringements. Full disclosure of key contracts including renewal or cancellation issues relating thereto.

• Subsequent to presentation to the Broker community, I act as IPO project manager to the client, including guidance, advice, technical knowhow, and facilitation between the client and the UK advisers throughout the process and subsequent to Admission.

• I review and provide guidance and input on all presentations; be they financial, marketing or reporting, prior to distribution to the UK teams

• I expect that my role will include that of ensuring “checks & balances” between the client and the UK advisers

The overriding objective is to present value added clients for Admission by applying the highest ethical levels possible, ensuring full disclosure and compliance to give the Brokers, Nomads, UK Legal advisers and all other

parties and regulators a high level of confidence and comfort in the client.



In the beginning our function includes, inter alia, the following:

• Initial consultation to understand the goals of the Company for listing and assessment of suitability for listing. This includes reviewing the rationale for listing, funds requirements, historical financials, strategic plans, management review amongst other things.

• Once agreed that a listing on AIM is the path to follow, I contract with you, then assist and guide the Company in preparing the Company ensuring it is prepared for the listing process prior to introduction to the Broking community.

• Guidance, assistance and facilitating in preparation of presentations for Nomads and Brokers in the UK to introduce the Company.

• Holding initial meetings and discussions with the Brokers and Nomads to find the best “short list” of advisers for the Company.

• Preparing for and attending introductory meetings with Nomads and Brokers in the UK, including assistance in preparing the detailed presentation.

• Assistance in the final selection of the “best fit” Nomad and Broker.

• Guidance and facilitating in the selection of the UK legal and Financial PR advisers

• Ongoing advice, review, backup and support to the Company in all its dealings and interactions with the various external parties (including English language support and guidance)



Thereafter our functions include, inter alia, the following:

• Review, with relevant staff at VP or senior management level, of Director and management review and reporting controls.

• Review and advising on preparation of supporting reports and documentation for the various external reports.

• Guidance and facilitating preparation of the Directors Risk Matrix.

• Assistance in preparing the Company at Board level, including with the UK regulatory environment and preparing documents and procedures for the UK Governance Codes

• Facilitating the meetings and processes between the reporting accountants and the Company

• Guidance and facilitating the production of the various required reports (including providing templates if required).

• Facilitating the legal due diligence process and data room creation, formation of Board Committees etc.

• Facilitating and assistance in managing the co-ordination of the work, timelines, presentations and processes through the entire listing process through to the road show and fund raising.

• Facilitating and guidance on building the Company website and Rule 26 compliance.

• Facilitating and advising the Company in management of its post listing period, including following governance codes


Some other requirements to note

• Formalised controls and monitoring become more relevant at management level (documenting meetings, controls, policies & procedures etc).

• Requirement to prepare and regularly review the Directors Risk Assessment and Matrix.

• Requirement for Independent NED’s (2) and a non-executive Chairman.

• Formalised position of a Company Secretary (usually filled by the CFO).

• After admission on AIM, the Company will need to adopt corporate governance requirements and good practice guidelines as set forth in the United Kingdom Corporate Governance Code, including establishing: • Audit and Remuneration Committees

• Adopting a Share Trading Policy and an Anti-bribery and Corruption policy

• Other Committees as may be required by the Nomad (Nomination Committee, etc.

• Website updated and maintained in terms of AIM Rule 26

• Maintenance of Investor Relations and Financial Communications, including the releasing of information to the market.

• Increased requirements for English language skills as Annual Reports, AIM related activities, presentations and correspondence are all required to be conducted in English (this is where I add additional value to you, the client).


Conclusion

• AIM is a global and sensible market for you, a truly global Company

• A listing on AIM, while initially a time consuming and a sometimes difficult process, is a positive and value adding step for the Company. If processes and procedures along with professional advice is followed correctly, the road to admission becomes smoother.

• Benefits include:

• Shareholder wealth is realised and unlocked

• A cost effective way to fund and achieve growth plans

• Company profile is lifted

• Increased access to capital markets and fundraising

• An acquisition currency created

• Increased status for the Company across all stakeholder elements

I look forward to sharing this journey with you and I am committed to ensuring that your Company enjoys the best advice, professional partnerships and outcomes possible, with a

smooth road to a successful fund raise.


London AIM Advisory Services Listing Israeli Companies on AIM

Thank you


Credentials & Disclaimer

Mark Reichenberg qualified as a Chartered Accountant (CA)SA in South Africa out of Ernst & Young (EY) and also holds a Bachelor of Accounting degree from the University of the Witwatersrand (WITS) in Johannesburg.

Mark is a highly experienced corporate and financial executive from a qualified professional, financial and listed company background with over 20 years of international experience in Finance, Operations, Business Development, Strategy and Company Leadership. Mark is experienced in IPO’s, Fund Raising, Strategic planning, Business Development, Company Turnaround, Financial Structuring and Financial Management.

Mark’s experience includes holding a main board position with a listed company.

Along with demonstrable knowledge and experience in the entire IPO process, Mark enjoys an “open door” to the top Brokers, Nomads, Legal Advisers and other corporate services firms in the UK, thus ensuring that the very best team can be put together in achieving a successful IPO.

Disclaimer

This document and its contents are confidential and are for the exclusive use of the person or persons to whom it is addressed and must not be copied, reproduced or distributed, directly or indirectly, in whole or in part, for any purpose to any other person without the prior written consent of Mark Reichenberg. (Reichenberg). Any person in receipt of this document who does not fall within the exemptions referred to below or to whom its distribution is not otherwise lawful should return this document to Mark Reichenberg immediately and take no other action.

Mark Reichenberg neither accepts liability for the completeness and accuracy of any information or opinions contained in this document nor for the omission of any material information from this document . Any reliance on this document by the Company, Company Management, the Directors and Proposed Directors is solely at their discretion and risk and implicitly indemnify Reichenberg against any and all responsibility for the information contained therein, omissions or inaccuracies. No representation or warranty, express or implied, is made by Mark Reichenberg as to any of the contents of this document.

This document has not been approved by an authorised person of any financial authority or regulatory body in the UK or Israel. Any investment activity to which this document relates is available in the United Kingdom only to (and any investment activity to which it relates will be engaged only with) Relevant Persons. This document is directed in the United Kingdom and Israel only at Relevant Persons and persons who are not Relevant Persons should not take any action based upon this document and should not rely on it. It is a condition of persons receiving and retaining this document in the United Kingdom and Israel that they warrant to the Company, the Directors, the Proposed Directors and Reichenberg that they are a Relevant Person.


Documents

Client intro presentation 27032016