September Edition 2022

September Edition 2022 IsraelDesks Presented by In Partnership with

In this meaty edition of IsraelDesks Magazine, we take a deep dive into the Life Sciences landscape in Israel, speaking with thought leaders from Greenberg Traurig, Dechert, Lipa Meir & Co., Gornitzky, S. Horowitz & Co. as we learn more about the latest deals, the drivers behind the industry, the role of VC, and where we are headed. While life sciences remains a hugely appealing industry to investors, we also share the views of multiple global and domestic law firms on the success story of Israel's unicorns - private companies with billion-dollar valuations - which span a broad range of sectors, but what opportunities and challenges lie ahead? Our next edition of IsraelDesks Magazine will explore the lucrative foodtech and ag-tech sectors. In thisedition,wealsoshed lighton thecurrent stateof relationshipsbetween international law firms and Israeli law firms, having conducted an in-depth survey of the marketing and business development strategies of law firms with Israel Desks, where they collaborate, and where they hope to go. A feature by S. Horowitz & Co. examines the current trends in the Israeli M&A Market, The Luzzatto Group analyses the pros and cons of a small country, such as Israel, and EBN reviews popular tech sectors that feature prominently in today’s transactions. Yigal Arnon - Tadmor Levy delves into issues surrounding consumer protection legislation, and Lipa Meir & Co. looks at the state of play regarding better corporate governance of public companies with no controlling shareholder. Lee Saunders, Editor IsraelDesks WISHING CLIENTS & FRIENDS A NEW YEAR WRAPPED IN JOY, LOVE, AND SUCCESS

IsraelDesks Survey » The relationship between international law firms and Israeli law firms Recent Market Trends » Time and Tide – Current Trends in Israeli M&A Market » The Advantages and the Disadvantages of a Small Country » Popular Tech Sectors of Today’s Transactions » The Application of Consumer Protection Legislation to International Platforms Operating in Israel » Towards Better Corporate Governance of Publicly Traded Companies with no Controlling Shareholder(s) – the Current Situation in Israel and the Outstanding Bill Industry Focus » Israel: Breathing More Life into Life Sciences » Israel’s Unicorn Success Story. What does the future hold and which sectors will produce the next batch of USD 1 billion companies? 04 12 20 24 30 36 42 48 Table of Contents 04 20 24

Industry Focus Israel: Breathing More Life into Life Sciences

5 Israel: Breathing More Life into Life Sciences Over 1,500 companies in life sciences sector in Israel With the Coronavirus pandemic brightly shining the spotlight on the pharmaceutical industry, and scientific disciplines more broadly, the Life Sciences and Health Technologies market is considered one of the largest globally, and is only moving in only one direction. Following a record-breaking 2021, pharmaceutical, life science and healthcare service companies are continuing to attract investors, fueled by innovations in biotechnology and patient services and ongoing digitalization. For its part in this sector, Israel has unique assets that constitute potential for global leadership. Israel boasts over 1,500 companies in the life sciences sector, more than 70% in medical devices and digital health, and there have been some headline transactions in the sector in recent years. In August 2022, a new consortium led by Israeli VC firm Peregrine Growth, having won the tender for the Incentive Technology Incubator, committed to jointly invest NIS 300 million in the companies operating in or graduating from the incubator, which has already produced an impressive list of life sciences and medical devices companies. These include Israel’s Valtech - sold to Edwards for USD 690million - Israel’s CartiHeal - sold to Bioventus for USD 500 million – and Israel’s Cardiovalve - sold to China’s Venus Medtech – all of these announced in 2021. These transactions follow some mammoth deals in recent years. Mazor Robotics was snapped up in 2018 by Irish-US firm Medtronic for USD 1.6 billion, the largest acquisition in the history of the Israeli life sciences industry, and Lumenis was acquired in 2019 for USD 1.2 billion, by funds affiliated with Baring Private Equity Asia (BEPA). But why does Israel do so well?

6 For starters, Israel has a high-quality public healthcare system, - with the nation’s medical records stored in a centralized database, and the country is blessed with cutting-edge inventors, scientists and academics, strong research and development, a tight-knit entrepreneurial community, and government support – all of which help the life sciences sector. "The Israeli life science business ecosystem, I believe, is uniquely positioned to stay relevant from many perspectives,” explains Greenberg Traurig New York shareholder, Adam Snukal. These include the facts that “Israel has been and continues to be a leader in the field of AI, which is powering most digital and smart medical technologies; the Israeli healthcare system has been at the forefront of telehealth for many years, creating a culture of both consumers and developers who are very attuned to this field of healthcare; the Israeli universities continue to produce thought leaders, scientists, researchers and the like who are aggressively pushing the innovation envelope across large portions of the industry; Israel has a track record of consistently returning value to those who have invested in its life science ecosystem. So, if an investor is faced with a choice between investing in an environment that has fostered very few successful exits vs. Israel (especially in a delicate investment market), Israel stands a good chance at securing those investment dollars; and The Abraham Accords and other countries in the MENA region which previously never had access to Israeli technology, now do. Many of these countries are investing billions in modernizing their health care systems, and between the innovation and geographic convenience that Israel offers, I believe that the local life science community can/will play a key role in the process.” This sector is often divided into four major subsectors – medical devices, digital health, biotechnology, and pharmaceutical therapeutics. According to data, the industry is still heavily skewed towardmedical device and digital health companies, followed by biotech and pharmaceutical companies. Globally, StartUpHealth trackedUSD9.3 billion in health innovation funding in Q1 2022, putting it even with 2021’s record-breaking pace. After years “Israeli life science business ecosystem is uniquely positioned” So where is the funding headed?

7 and years of predicting the promise of digital health tools like telemedicine and remote patient monitoring, the last two years have turned the vision into a reality. Due to a range of market forces, like a COVID-induced push towards virtual medicine and relaxed reimbursement regulations, we saw annual investments in health innovation double in a single year. In fact, more health tech funding was raised in 2021 than in the five years of 2013 to 2017 combined. And even though Israeli tech companies raised USD 4.5 billion in Q2 2022, down 31% from on Q2 2021, Greenfield Partners, an Israel-based investmentfirmfocusedonearlygrowthstagetechnologyandtech-enabled businesses, found that the leading sector for new startup investments in Q2 2022 was digital health (24%) - followed by cybersecurity, AI and machine learning, cloud technology and development. “Med-tech is here to stay, regardless of the current slowdown and fiscal uncertainty,” adds Gary Copelovitz, partner and co-head of the Technology, Corporate and M&A Department at Lipa Meir & Co. “The market, however, is far from being uniform. A strain of decreased spending in being felt in some areas, yet others are still going strong, to name but a few: adaptation of models that better fit the lifestyles and corresponding needs of the young-digitally savvy generations (e.g. wearable sensors and devices); advancement and implementation of telemedicine services, specifically in relation to remote diagnosis; development of machine-learning algorithms to improve diagnoses, treatment and outcomes; and fem-tech, a term that refers to diagnostic tools, products, services, wearables and software that use technology to address women's health issues.” Two of the hot sectors are indeed digital health and wellness,” confirms Itamar Mei-Zahav, a partner in the firm's Technology department at Gornitzky. “Those two sectors have developed in the last few years and are continuing to interest investors,” he adds. This is partially fueled by the emergence of digital health companies, which are hi-tech companies that operate in the health or medical space. Such companies can offer a digital service of medical doctors via telemedicine, can store medical data on the cloud for HMOs or providers, and they can offer diagnostic tests by analyzing pathology or other imaging reports. Medical devices and Digital health in Israel are performing well

8 While these companies offer solutions in the health or medical space, they borrow and use tools from the hi-tech industry, meaning the relevant talent for starting such companies is available in the ecosystem. The investments needed to make progress in such companies are sometimes comparable to the investments needed in the hi-tech space, and so we have witnessed some of the traditional hi-tech investors becoming increasingly more interested in digital health companies. CliffordDavis, a partner and co-chair of the International Corporate Practice Group at S. Horowitz & Co., adds: “Our health innovation clients (as well as technological hubs of universities whom we represent in this field) are continuing to receive investments at the same rates as before. It must be remembered that there are funds out there with money raised over the past couple of years and those funds must be invested in order for management to reap the benefits of carried interest – so it is too early to state whether there is any trend by looking at absolute numbers in funding. The relevant part of the pipeline should be looking at two sources of financing – pharma who have their own VC arms, or wish to embark on collaboration and R&D – and this sourcewill, to an extent, be agnostic to geo-political considerations, and VC funds – the latter will be more sensitive, and it will be interesting to note if during this year amounts being raised by funds for future investment will drop.” The funding growth curve might slow due to the sustained war in Ukraine, supply chain disruptions, and rocky public markets. As David Rosenthal, co-chair of Dechert’s Global Corporate Finance and Capital Markets Practice and co-lead of the firm's Life Sciences Practice, cautions: “The public markets are close to being shut. Things have not been this quiet in many years. With valuations so low, companies are reluctant to sell shares at such depressed (and relatively dilutive prices). Often, the deals that are getting done are structured deals” but goes on to add that “deal making will presumably commence later in the year as companies cannot wait any longer to raise capital and valuations will be perceived as attractive to investors.” Greenberg Traurig’s Adam Snukal adds. “While we are seeing a slowdown of some degree due to global instability, supply chain challenges and market corrections, the life science vertical seems to have more staying power as compared to several others. The obvious reason for this is – the particular human condition that these companies seek to address isn’t likely to change anytime soon. In fact, life science (while not without its challenges) has historically manifested a certain degree of staying power amongst investors whileother industries cameandwent.So,all inall,while I doexpect there tobe a small drop in investment dollars dedicated to Israeli life science companies

9 and while I believe we’ll see a fairly dramatic change in the valuations that companies are able to secure as compared to the previous five years, I don’t foresee a material reduction in the overall investment dollars / the number of investments.” “Whatever complaints may be laid at the feet of Government and the Israel Innovation Authority (“IIA”) – in the field of technology funding, research and support, Israel is a world leader – just look at the EU and the US which are positively backward in comparison,” says S. Horowitz’s Clifford Davis. “We should be proud of the support (of whatever political hue) the Govt and IIA has given – they have been the strategic super growth compound for the bio-tech field in Israel – proof of this can be looked at other countries failure in this regard.” Gornitzky’s Mei-Zahav adds: “The IIA provides Israeli companies that have developed new and innovative technologies to receive development funds for their technology; specific new programs allow the companies to receive funding relatively quickly and match other private investments.” Copelovitz at Lipa Meir is also positive. “The Israel Government remains highly supportive of this sector. One particular jurisdiction also of interest, worth mentioning, is that of Finland, with the launch of the life sciences collaboration between the Israel Innovation Authority and Business Finland. What with both countries having leading innovation economies, and being global leaders in digital health, there exists an incredible potential for collaborative efforts.” Investment needs differ at every stage of growth for life science and healthcare companies. There are many avenues available to raise capital at various stages, each with its own benefits and considerations. Savvy founders and start-up leaders should understand which asset class can offer thebest opportunity toadvanceandsupport their company’s success. Across all sectors - therapeutics, diagnostics, tools, medical devices and digital health - the approach you take today to create your syndicate of investors will impact all future funding rounds. Incubators (sometimes called accelerators) can be great resources at the earliest stages of a company’s development. While the long-term outlook looks extremely strong, how has the Government been helping?

10 Life sciences companies often need significant amounts of capital to reach scientific and operational milestones, particularly in the clinical growth stages. Venture capital investments can help and continue to trend upward for companies at all stages of development. As Lipa Meir’s Copelovitz points out: “Different VC funds in the life sciences field seek diverse goals (e.g., note the goals of social impact funds). In an attempt to apply a common denominator, however, one can venture that funds are looking to continue challenging and disrupting the ‘traditional’ healthcare industry whilst maintaining dominant trends, such as: preventative and personalized care; the pivotal role of wellness and reduction of treatment costs. In addition, one can expect the world of social impact investing to continue its impressive expansion.” Venture firms bring a wealth of resources to the table outside of just capital needs. Life science and healthcare VCs have likely experienced the challenges and successes of multiple operations in the pre-clinical, clinical and commercial stages. For this reason, they can help founders and managers navigate pitfalls and capitalize on scientific and market opportunities. Investment into biotech and health care boomed during the pandemic as thousands of venture capital firms turned their attention to breakthrough artificial intelligence, cancer-detection technology, mental health treatments, digital doctor visits, diagnostics and more. Some VC investors believe that biotech has matured as a business and that it carries lower risk than it did in the early days. Others think it has suffered from underinvestment in the past. Still others note that investment in the sector is partly driven by the need to diversify VC portfolios. Broadly speaking,across the sector, though the interest remains high.Peregrine Ventures may have set up its healthcare fund but it is far from alone. In July 2022, Israeli healthcare VC fund aMoon raised USD 340 million for a second fund, aMoon Growth II, which will focus on later-stage investments and will support entrepreneurs and scientists developing solutions combining biology with AI, Big Data, and other advanced technologies. This follows on from its 2019 fund – a USD 750 million fund that invested in 22 companies. This past May, Israeli healthcare investment platform Sanara – backed by Teva and Philips Healthcare - set up USD 100 million VC fund to transform healthcare and to take advantage of the opportunities created by the shakeup caused by the Covid pandemic. There may be somewhat more hesitation, especially on valuations at present, but interest and demand in Israel remains high, with signs that there is plenty of life being breathed into the life sciences sector for the foreseeable future. What do VCs want when looking at life sciences?

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12 Industry Focus Israel’s Unicorn Success Story. What does the future hold and which sectors will produce the next batch of USD 1 billion companies?

13 Israel’s Unicorn Success Story Boosts Optimism But what drives Israel’s disproportionate success? As the world faces economic uncertainty, rising costs, and inflation, the tech scene in Israel offers optimism and relief. In Q1 this year, Bloomberg reported over 1,000 unicorns globally, and Israel – with just 0.1% of the global population - accounts for some 8%. In Israel, the number of unicorns is rapidly heading towards the 100-mark. The huge financing deals and large VC funds chasing the next successful investment have raised the value of companies and created unicorns at an unprecedented rate. The USD 25.6 billion Israeli firms raised fromVC is roughly the same as India, with a 100 times larger population, as well as the UK, the leading innovator in Europe, and half that of the European Union, with more than 400 million people. “At the moment, we’re seeing increased activity at the seed level, new startups being formed and new funding available to early stage ventures.We are also seeing Israeli unicorns acquire foreign and local targets that are less optimistic about growth in current conditions or that have remained limited to specific features or single product offering,” adds Yair Geva, head of Start-ups and Emerging Companies at Herzog Fox & Neeman (“Herzog”). Israel’s tight-knit entrepreneurial community, strong research and development, educated population and government support, has helped it produce the most start-ups per capita of any country, with nearly 3,000 in Tel Aviv alone.Moreover, every successful ecosystem has institutions which took a leading role in its creation. In many cases, it is either a university, an accelerator or a massive corporation. In Israel, it is the army, which became one of the world’s top start-up accelerators, by accident. Israeli technology companies raised all-time high of USD 26.6 billion in 2021, over twice that of 2020

14 There is a tradition and mentality geared towards innovation, where success stories attract more talent and failures generally do not discourage, but encourage additional attempts. Oded Uni, partner at Gornitzky, said: “We see very young students taking computer science and cyber-security courses at school with a view to be drafted to Israel’s elite technological military units (which, many times, would open the door to a successful hitech career). Another reason is what I call ‘the practicality of the invention.’ While in other places we sometimes see a race for the coolest technology, in Israel the unicorns are usually focused on solving real problems which could yield an unbelievable value. Another explanation is that considering Israel’s small size, Israeli startups are set up from inception with an eye towards the global markets. That dictates awareness of market trends and strategic planning customarily found only in more mature companies.” Leading multinationals, growth and early-stage global VCs are now identifying Israel asanunparalleledplaceof talent andsuccessful innovation. In addition to multinationals such as Google, Meta, Amazon, Intel, Motorola, Medtronic, and many others opening hubs in Israel, now prominent VCs such as Insight Partners, Tiger Global, Blackstone and the Vision Fund are putting people on the ground. According to a report by Start-Up Nation Central, an Israeli nonprofit in the technology sector, the most active foreign investor in Israeli companies in 2021 was Insight Partners, a New York-based firm that invested in 49 rounds in 2021, up from 17 in 2020. The company’s portfolio includes Israeli success stories like Wix and, as well as Shopify and Twitter. American investment firm Tiger Global Management participated in 16 funding rounds in Israeli start-ups in 2021, up from just three in 2020. Foreign VC funds make up four of the top 10 most active funds in Israel, according to the report. "We are also seeing substantial contribution by existing investors in the financing rounds whowish tomaintain their holdings in companies they had previously invested in," pointed out Yael Benyayer, partner at EBN. "Many, many new funds are closing, new deals are being announced every day,” adds Jeremy Lustman, partner at DLA Piper. “The Israeli market is still on fire, relative to others, but just not at the height we were a few months back." Who is investing?

15 Some caution has naturally set in “These are unique times for Israeli tech, which has demonstrated to date, and in line with historical performance, a high level of resilience to market conditions, but that is naturally facing market challenges similarly to all tech companies,” says Herzog’s Yair Geva. Strategic and financial investors are still looking at Israeli technology and other sectors but with caution. “As before, deals are driven by the potential technological edge, though investors are expected to be now more cautious,” says Amit Steinman, Corporate partner at S. Horowitz & Co. “This is particularly true with respect to assumptions about business models and they hold a more realistic view on synergies, as well as a careful view of capital costs, given these changing conditions.” “In 2022, economic uncertainty and rising interest rates have contributed to a significant slowdown in the global capital markets, with the technology industry among the most heavily impacted,” adds Lee Hochbaum, M&A partner at Davis Polk in New York. “However, given the track record of recent Israeli companies and the surplus of human capital, Israeli companies seem well positioned to capitalize when the markets reopen.” Douglas Getter, head of Dechert’s U.S. corporate practice in Europe and London, adds: “We continue to see strong interest in the Israeli tech sector, particularly related to financial services, payments and security, data collection, medical and non-regulated defence, but the downturn, rising interest rates and collapsing multiples have slowed things down on the sellside as potential sellers adjust to the new reality, and on the buy-side as investors have become more cautious.” Yariv Ben-Ari, partner, at New York based Herrick Feinstein, adds: "In light of rising interest rates and prevailing economic concerns, we have been working with our Israeli clients to identify market segments that will present opportunities for well capitalized buyers to transact across the US. While some lenders are more conservative, we have seen continued growth particularly where there are existing relationships with banks and PE funds.” Amir Zolty, partner at Lipa Meir & Co., adds: “We don't see a rush to invest. Yet, VCs and CVCs keep investing in promising start-ups with strong teams, be it at lower/more realistic valuations. We also see deep pocketed PEs looking for bargains at this day and age.”

16 Israeli high-tech start-ups cover all spheres of life, from technologies that will protect computers and smart phones, to digital medicine that finds innovative ways to treat patients all the way to a lab made hamburger that will revolutionize what and how we eat, and multinationals and VCs remain very interested. “Deals are driven both by groundbreaking technologies and by the ability to acquire high-level solutions that meet company needs faster and more economically,” points out Dr. Kfir Luzzatto, President of The Luzzatto Group. Notable M&A transactions in 2022 span the range of sectors. They include Intel’s purchases of Israel’s Tower Semiconductor for USD 5.4 billion and Israeli computing tech start-up Granulate for about USD 650 million. Google also bought Israeli threat detection firm Siemplify for USD 500 million, and Qualcomm of the US acquired Cellwize Wireless Technologies, an Israeli maker of cloud and AI software that can speed up deployment of 5G networks, for around USD 350 million. The enormous amount of cash flowing into Israeli ‘SiliconValley’ has rocketed, and continues to pour into various segments of the high-tech sector, among them enterprise IT and data infrastructure, fin-tech, cybersecurity, data, and bio-med companies – the hottest sectors in recent years. About 65% of the total funding went to companies in these sectors, compared to 52% in 2020. In fact, In March 2022, Glilot Capital, one of Israel’s leading VC funds, raised USD 220 million for its fourth Seed fund, to invest in young companies in the fields of cybersecurity, enterprise software and developer tools. Israel’s unicorns span a range of verticals, among the most vibrant - cybersecurity. "As Covid-19 has further advanced the shift from in-person interactions to the online-realm, Israeli cybersecurity enterprises, which offer tools and technologies for safeguarding organizations and their critical Cyber out in front And yet, many tech sectors are particularly hot

17 Fintech and Big Data remain robust systems and sensitive information, continue to be a center of attraction and focus for various local and global investors, including VC and private equity funds," adds EBN’s Yael Benyayer. In December 2021, Japanese investment giant SoftBank co-led a USD 400 million investment in Israeli cybersecurity firm Claroty. Cybersecurity company SentinelOne completed its NYSE offering in June 2021 at a value of USD 9 billion, one of the year’s striking IPOs, while other proactive Israeli cyber unicorns include Armis, Cybereason, BigID, Cato Networks, and Axonius. “AI and Fintech are here to stay and grow, and still attract investors” adds Lipa Meir’s Amir Zolty. In fin-tech, there is also a large presence of unicorns: eToro is the Israeli-founded insurance company that had a valuation of USD 10.4 billion in 2021. There is also Forter, Next Insurance, Rapyd, Riskified, Melio, Lemonade and Payoneer, which went public in 2020 and 2021 respectively, and just in March 2022, Capitolis joined the unicorn club, cementing Israel’s position as a leader in Fin-Tech. “One of the hottest areas currently is Web3 and specifically, infrastructure technologies supporting Web3 applications. Other areas that continue to attract significant capital and top tier investors are developers and dev-ops platforms,” adds Herzog’s Yair Geva. “Big data continues to be a hot commercial field, with aspects of how to collect, verify and utilize the data coming into play,” agrees Kobi Ben-Chitrit, M&A partner at Yigal Arnon - Tadmor Levy, the firm’s name since this year’s landmark merger of Yigal Arnon and Tadmor Levy, today the third largest law firm in Israel. He adds: “Businesses are becoming ever more reliant on data in their operations, and being agile enough to collect and process data in real time has become a significant competitive advantage,”. In a recent transaction, we assisted IBM in acquiring an Israeli data observability startup called Databand.” “Israeli companiesbenefited fromtheextremely activeglobal capitalmarkets in 2021, with technology companies in particular attracting significant foreign investment capital and a number of Israeli companies — including ad-tech platform Taboola — taking the opportunity to list in the US, often via SPAC business combinations,” adds Davis Polk’s Lee Hochbaum, M&A partner at Davis Polk in New York. In addition to Taboola, the vibrant ad-tech

18 Food-tech and ag-tech catch the eye sector includes unicorns - AppsFlyer, SimilarWeb and ironSource, which just announced a merger with U.S. games developer Unity, with a joint value of USD 13 billion. Pharmaceutical, life science and healthcare service companies continue to attract investors, fueled by innovations in biotechnology and patient services and ongoing digitization. Israel has a high-quality public healthcare system, with the nation’s medical records stored in a centralized database. Within this, medical devices is key. “This industry is still hot and Israel is at the forefront. The medical device industry will continue to witness the integration of AI and that is another area where Israeli companies excel,” explains Guy Ben Ami, who leads Carter Ledyard & Milburn's Israeli crossborder practice. An increasing number of food-tech and ag-tech companies are indeed catching the investor eye. The U.S.-based research firm, Start-up Genome ranked Tel Aviv and Jerusalem fourth for ag-tech globally, trailing Silicon Valley, New York City and London in first place. Benyayer of EBNagrees: “We havewitnessed a surge in interest in the FoodTech industry, with skyrocketing fundraising. We represented S2G Ventures andManta Ray Ventures in the impressiveUSD347million Series Bfinancing round in Future Meat Technologies Ltd., which developed a technology to produce lab grown meat products, making it the largest single investment round in the cultivated meat industry.” Also, the success of Beyond Meat and Impossible Foods shows that there is consumer demand for plantbased meat alternatives. There was also a USD 105 million investment in cultivated meat start-up Aleph Farms and MeaTech. Israeli food tech startup Redefine Meat announced plans to commercially launch its plant-based alternative meat products abroad. “Food and ag-tech are definitely getting interest from devoted VCs as well as government funding, motivated by public interest,” agrees Kobi BenChitrit, while Dr. Ziv Preis, head of Tech, Corporate and M&A at Lipa Meir, adds “I expect to see the continuation of certain sectors, which have been strong in the last 2-3 years, including ag-tech, food-tech, telehealth and intense use of applied artificial intelligence.”

19 Remote working demanding new tech Growing interest for clean energy and climate-tech Preis adds: “In the future, I expect to see focus on technology that supports the shift to hybrid work model (for example, facilitating remote on the job training). As DLA’s Jeremy Lustman adds: “Tech investment generally is still moving at a strong pace; some specific areas that seem to be on an upswing are HR-tech, which makes sense to me given the dramatic overhaul of the workforce in the wake of Covid.” Dr. Kfir Luzzatto agrees: “Several fields are hot right now, particularly in food-tech and ag-tech, and we would also expect to see a growth in femtech, (technology supporting women’s health), climate-tech and other environmental technologies.” “The general public and governments in the Western world are increasingly motivated to support clean energy and sustainability tech initiatives, and the private investment world is picking this up,” adds David Roness, Corporate partner at Yigal Arnon Tadmor Levy. Israel is indeed home to more than 500 companies that deal with clean technology and specialize in sustainable agricultural technologies, clean energy concepts and electric vehicles. Israeli climate-tech companies raised USD 2.2 billion in 2021, 57% higher than the previous 2020 record, according to a comprehensive report, “Israel’s State of Climate Tech 2021 by the Israel Innovation Authority and non-profit PLANETech. Israeli exports of goods and services are projected to reach a record high of USD 165 billion in 2022, up 15% from 2021’s USD 143 billion in exports, itself a record, according to a July 2022 report by the Ministry of Economy and Industry - and technology lies at the heart of this. Israel’s tech firms saw exits jump an astonishing 520 percent in 2021 to an unprecedented USD 81.2 billion in value, shattering all previous funding records, according to an annual report by consultants PwC Israel. Although 2022 is experiencing rising inflation, interest rates and economic uncertainty for all, the Israeli experience is that if the technology is unique, the team exceptional, and the solution helps to address a real-world problem, the sky remains the limit.

IsraelDesks Survey The relationship between international law firms and Israeli law firms

21 A recent survey of global law firms with Israel Desks has produced a fascinating set of results for Israeli firms to be aware of, when it comes to their referrals, approach to Israel, and their marketing and BD efforts. When the Israel Desks of global law firms were asked how many Israeli law firms they worked with, 40% worked with between 4 and 6 and over a quarter worked with more than 10 law firms, with two-thirds of respondents that quality of the work was the biggest factor in deciding who to work with, and a quarter saying it was down to the relationship with the Israeli firm. Three-quarters of Israel Desks said they are “always” looking to expand their Israel network, with the lawfirms towhomthey already referred fairly evenly split across the big-five, the top 20 law firms, as well as small and boutique firms. The relationship between International law firms with Israel capabilities and Israeli law firms To work with new law firms in Israel that they do not work with already, respondents said that such firms would need to demonstrate specialized expertise that their current batch of firms did not have, an ability to specifically cater to their client's needs, and trust. Of the work referred out to Israeli law firms, a quarter was corporate and commercial, followed closely by M&A, then Litigation, Tax, and Real Estate. Relating to inbound work sent by Israeli law firms, M&A and Capital Markets dominated, followed by Real Estate and Banking. Three-quarters of Israel Desks have a strategic plan for 2022, with almost half receiving marketing support from outside of Israel, and a third having on-the-ground support, while over half confirmed their

22 position in the Israeli market was a “work in progress.” In terms of marketing efforts, over half of Israel Desks said they met with Israeli law firms, ahead of using the Israel Desks platform, which two-thirds of respondents found helpful, as well as sponsoring events in Israel. With regards to generating new work, Israel Desks tended to target law firms more than they do companies and investors directly, with 40% of respondents reading updates from Israeli law firms, as well as follow them on social media. Interestingly, two-thirds of respondents had increased their Israel Desks budget, one-third of Israel Desks came to Israel over 4 times a year, and almost three-quarters have noted that Israeli-related work has increased in the past two years - impressive results given the global pandemic in that timeframe.

23 WWW.LEGALMARKETING.CO.IL NISHLIS@LEGALMARKETING.CO.IL TEL: + 972-72-338-7595 FOLLOW US: LEGAL MARKETING SETTING THE BENCHMARK BRINGING YOUR GLOBAL FIRM TO ISRAEL Israel is a hotbed for innovation. Over 100 international law firms with an Israel desk are competing for clients in a country the size of New Jersey. We know the market and we know how to make you succeed. Services to international firms looking to increase their presence and brand awareness in Israel: Strategy and Business Development Road Show Planning Event Planning Increase Brand Awareness Email Marketing PR and Media Hebrew Content Writing

Recent Market Trends Time and Tide – Current Trends in Israeli M&A Market

25 During 2020-2021 the Israeli market, having recovered from the initial Covid-19 influence, has seen exceptionally high volumes of M&A deals. Somuch so that according to certain analysts, the year of 2021 reflected a 70% increase in overall M&A deal value, with both local and foreign entities acquiring Israeli companies and fuelling the market with cash. This period of time has been the finest hour of sellers. Low interest rates alongside plenty of available funds and growing global interest in technology companies in the face of the Covid-19 crisis, led to increasingly high demand on the part of buyers, looking to take advantage of the inviting investing atmosphere in Israel and invest in Israeli companies. Naturally, a respective rise in the valuation of acquired companies followed, all leading to a very pro-seller market. * We wish to extend special thanks to our intern, Amnon Tsafrir, for his valuable contribution to this article. Time and Tide - Current Trends in Israeli M&A Market By: Amit Steinman and Avner Itzhaki, S. Horowitz & Co.* We may be looking at a major upheaval in the Israeli M&A market, as recent times have been quite a change compared the last couple of years. Amit Steinman Partner Avner Itzhaki Partner

26 Consequently, we have witnessed a significant portion of our clients, mainly foreign buyers looking for a toehold in the Israeli market, willing to pay considerable sums of money, as well as to compromise on some legal aspects of the deal, all in order to secure their desired transaction. It seems, however, as though we are witnessing reality twisting in a different direction, as recent developments indicate. As seen across the globe, high inflation rates lead state treasures and national banks to respond by increasing interest rates. Israel is no exception to this tendency (albeit to a lesser extent), with local interest rate increasing from 0.1% to 2% over the past five months. It appears that the end of the cheap money period may be approaching, with following sell-offs by investors and sharp downfalls in public companies' values, which may mark the trend reversal.Although a full assessment of the consequences of the new market trend on M&A deals seems somewhat premature at this stage, it can be carefully said that we are starting to see a shift in the pro-seller paradigm that has dominated the market in recent years. Nonetheless,we see that many of the relevant companies and investment funds still appear to have plenty of available cash for investment and an appetite for investing it. In addition, the Israeli industry, which is based on strong innovation and tech sectors, is expected to continue to be an attractive target for foreign investors, as technology innovation continues to drive the world economy. This leads us to believe that while we may see a temporary pause in investments while players revaluate the changing market and their increased costs of capital, a stagnation is not expected. Rather, we expect to see a continuance of the previous investment trends albeit with potentially different market characteristics. These characteristics are likely to reflect a more buyer-oriented market in which buyers might find themselves, in contrast to the investment atmosphere of previous years, in a better position to shape the terms of the deal in their favour. Buyers are also likely to benefit from a decrease in company valuations, which we expect to trickle down from public companies to private ones. Indeed, among our clients, we still see companies receiving diverse investment proposals even though the proposed valuations may be lower than their initial expectations. Likewise, we continue to help local and foreign investors to take advantage of attractive deal prices through investments in Israeli companies. We can already see the shifting market standards reflected in some of the recently published transactions. For example, the American private equity fund, Insight Partners, currently takes part in a USD 35 million equity financing of Bizzabo, an Israeli Hi-Tech company focused on

27 innovative events and conferences organizing solutions. This financing, which reportedly reflects a company value lower by 30% compared to the prior round in 2020, also includes a 3X liquidation preferences protection. This protection, which basically guarantees an investor a three-times return on its investment in case of a future exit, would have been difficult to imagine in similar investments that took place in the pro-seller investment atmosphere of the last couple of years. Another trendthatwearestartingtoseeamongour clients isan increase in the use of earn-out and similar mechanisms to determine a bigger portion of the deal consideration. This mechanism allows parties who disagree on the valuation of a company tomake a portion of the consideration subject to the occurrence of future events, thus reducing the risk associated with the deal for the buyer, while allowing the seller to enjoy the future success of the business despite current market uncertainties. Recently, we have even seen another type of M&A deal taking place, one almost unheard of in the local market: a hostile takeover attempt where Aviat Networks attempted to take over Ceragon Networks, following a 68% drop in its traded share price compared to its twoyear record high. There are a few reasons why hostile takeovers in Israel are so rare, but of particular note is the structure of the Israeli capital market, which traditionally includes mostly public companies with a strong controlling shareholder, as well as a unique limitation under Israeli law which requires buyers that wish to acquire initial control in a public company to make their bid public through a “Special Tender Offer”. According to this procedure, the buyer's offer must not only be addressed to the shareholders of the company in their entirety, but it also must be approved in a general meeting. This means that even if a buyer manages to find enough shareholders who are willing to sell their holdings, a majority of disagreeing shareholders could still frustrate the deal. However, the increase in IPO of tech companies without a strong controllingshareholderwhichwehaveseen the last fewyears,particularly during the SPAC Spring of 2020-21, together with a sharp drop in share prices may make this type of deal more attractive in the near future, as evidenced by the on-going Ceragon Networks transaction. Another deal of similar nature is the tender offer made by Panopto for its competitor, Israeli-founded video creation company Kaltura. It is the third tender offer Kaltura has received from Panopto in the last couple of months, which comes as no surprise as Kaltura's shares' have dropped by roughly 80% since its USD 1.3 billion IPO only last year.

28 Stock-for-stock mergers and acquisitions are also starting to gain more traction in Israel. In addition to the increase in the costs of funds, which makes cash investment more expensive, this trend may be attributed also to psychological reasons that arise from giving up equity under a low company value by investors who have not too long ago seen their stock going for much higher figures. In this sense, it is somewhat difficult to convince an investor whose stock was sold last December for USD 100, to now sell it for a third the sum. But when an acquiring entity who also took a hit to its share price offers to acquire a company with a consideration consisting of shares of its own, the picture turns into amore comfortable transaction from the shareholders' view who may consider the current situation in the capital markets to be temporary and expects the purchaser's stock to increase in value, much like their own case. A look on the recently-announced merger between Israel's IronSource and Unity Software., the popular video game software developer, shows exactly this. The transaction took place early last month, after valuations of both companies dropped by roughly 80% in the preceding seven months. Reflecting a company valuation of USD 4.4 billion while being entirely stock-for-stock, this transaction may have been easier to swallow for both parties: IronSource's shareholders were not required to liquidate their holdings for low figures, while Unity was not required to bear the rising costs of funds. Similarly, such transaction, in which employee stock options are usually rolled-over into the buyer's stock instead of being cashed-out, obviates some of the concerns of this important group of constituencies. Another practice, which may also become more common for companies seeking finance as the market transforms into a new phase, is debt financing. In light of current market conditions, companies that find themselves in financial hardships and in need of swift funds are not too eager to give up equity portions given their relatively low valuation at present. This mostly psychological effect is heightened by the fact that most investors receive anti-dilution protections as part of their investment, which guarantees at least partial protection from a dilution of an investment round which reflects a lower valuation than the one at which they have invested. This means that the dilution of ordinary shareholders in such “down round” is usually higher than that of the investors, and, accordingly, the incentive of such ordinary shareholders (which typically include the management of the company) to agree to such investment is lower. In these situations, financing through debt becomes a more attractive solution, and together with the increase in the number of institutions that specialize in financing early-stage

29 companies, we expect to see more debt financing as company valuation continue to decrease. Indeed, we are already witnessing several clients being involved in loan agreements, including investors that invest in transactions involving debt financing coupled with equity kickers, who find this type of investment appealing on their part because of the general increase in interest rates and their improved bargaining position. All in all, the new market situation is still in its early stages and, as saying goes, it is tough to make predictions, especially about the future, but it is not too far-fetched to draw an interim conclusion, according to which there are new rules to the game, and that they are here to stay, at least for the near future. But for all the shifts and changes, it does appear that the Israeli investment market is still very much alive and kicking, although not in exactly the same way as it was before. These shifts and changes, may mark a general shift towards a more pro-buyer atmosphere, as can already be seen in recently published M&A deals and in our clients' ongoing transactions. Now, it is for time to tell how things will unfold.

Recent Market Trends The Advantages and the Disadvantages of a Small Country

31 The past two years have brought many COVID-19-related challenges in almost every aspect, but as far as IP in Israel is concerned, it also created opportunities. Israel was not unprepared; its extensive experience in dealing with crises, coupled with its top technological abilities, have proven themselves equal to coping with the pandemic. All the services of the Israeli Patent Office were provided almost as usual, thanks to the significant investment made in the past to develop online services, with the exception of certain legal proceedings which could not be conducted online. In general, COVID-19 did not significantly affect the submission of applications for registration of intellectual property rights in Israel; it may strangely even have had a positive effect since instead of slowing down, the IP activity level increased. The Advantages and the Disadvantages of a Small Country By: Dr. Kfir Luzzatto, President and Senior patent attorney, and Lilach Luzzatto Shukrun, Partner and Senior patent attorney Dr. Kfir Luzzatto President and Senior patent attorney Lilach Luzzatto Shukrun Partner and Senior patent attorney

32 Working from home apparently opened unexpected possibilities for inventors, creators, and entrepreneurs, who found more time to pursue projects previously set aside or delayed because of time and work constraints. Somuch so that we see now a reluctance to go back to work in the office as before the pandemic, although the general sentiment in Israel (true or not) is that COVID-19 is behind us. This is undoubtedly also due to the swift action of the Israeli government that secured COVID vaccines for the whole population at a very early stage. In addition to the changes introduced because of COVID-19, such as enabling online discussions and proceedings, improving regulations, and providing online services, there have been some interestingdevelopments in various areas of intellectual property that are reviewed below. Continuous Development of International Cooperation Israel is a member of many multilateral international treaties, such as the Patent Cooperation Treaty, The Paris Convention for the Protection of Industrial Property, the Madrid Protocol, The Berne Convention for the Protection of Literary and Artistic Works, and more. In 2020, Israel also joined The Hague Agreement Concerning the International Deposit of Industrial Designs. As expected, the number of design applications filed by Israeli applicants via the Hague Agreement continues to grow. “The Abraham Accords,” the peace agreement signed initially between Israel and the United Arab Emirates, is one of the most significant developments in this area in recent times. Briefly known as “the Accord,” it resulted in further peace and cooperation agreements with Bahrain, Sudan, and Morocco. Recently, they also brought about a small step forward with Saudi Arabia, which now allow Israeli airplanes to fly over its territory, which significantly shortens flying times to some destinations. These agreements have far-reaching positive implications for the region’s economic development, both for Israel and the Gulf states. This formal peace agreement is a natural evolution of the relationships that Israelis have maintained with Arab states “under the radar” for many years. As is natural because of their international orientation, IP firms were among the first to openly reach out to each other, and they found professional, warm, and eager business partners at the other end. It may seem incredible that strong relationships could develop spontaneously in a matter of days after years of disconnect between the Arab world and Israel, but in truth the divide between people and businesses has never run as deep as the political situation would suggest.