No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus does not constitute a public offering of securities.

PROSPECTUS

New Issue

April 22, 2025

SHELFIE-TECH LTD

This prospectus (this “Prospectus”) of Shelfie-Tech Ltd. (the “Corporation” or “Shelfie”) is being filed with the Ontario Securities Commission for the purposes of becoming a reporting issuer pursuant to applicable securities legislation in the Province of Ontario (the “Province”). Upon the final receipt for this Prospectus being issued by the Ontario Securities Commission, the Corporation will become a reporting issuer in Ontario. This Prospectus is also being filed to qualify the distribution in the Province of 1,864,617 Common Shares (as hereinafter defined) of the Corporation issuable to the holders of a total of 1,864,617 previously issued subscription receipts of the Corporation (each a “Subscription Receipt”), upon the deemed exercise by such holders of their right to acquire, without additional payment, one Common Share for each Subscription Receipt. See “Plan of Distribution”.

The Subscription Receipts were issued pursuant to subscription agreements between the Corporation and each of the subscribers thereto.

The price of the Subscription Receipts was determined by the Corporation.

There is no market through which the Corporation’s securities may be sold and shareholders may not be able to resell securities of the Corporation owned by them. This may affect the pricing of the Corporation’s securities in the secondary market, the transparency and availability of trading prices, the liquidity of the securities and the extent of issuer regulation. See “Risk Factors”.

An application has been filed by the Corporation to have its shares listed for trading on the Canadian Securities Exchange (the “CSE”). Listing will be subject to the Corporation fulfilling all of the listing requirements of the CSE.

An investment in the securities of the Corporation is subject to a number of risks. Investors should carefully consider the risk factors described under “Risk Factors” before purchasing any securities of the Corporation.

No underwriters or selling agents have been involved in the preparation of this Prospectus or performed any review or independent due diligence of its contents.

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No person has been authorized to provide any information or to make any representation not contained in this Prospectus and, if provided or made, such information or representation should not be relied upon. The information contained in this Prospectus is accurate only as of the date of this Prospectus.

As at the date of this Prospectus, the Corporation does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside Canada and the United States of America.

Unless otherwise noted all currency amounts in this Prospectus are stated in Canadian dollars. The Company's reporting currency and functional currency in the financial statements is the United States dollar. Amounts denominated in United States Dollars are stated as "US$".

The Issuer is incorporated in the State of Israel. Each of Ben Tsur Joseph, Lilach Lotan, Yehudit Halpern, Zaler Mordchai Salom Iosf, and Haim Alkoby being a majority of the directors and officers of the Corporation, reside outside of Canada and have appointed Aird & Berlis LLP at its office located at Brookfield Place, 181 Bay Street, Suite 1800, Toronto, ON M5J 2T9, as their and the Corporation's agent for service of process in Canada. Prospective purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service. See "Risk Factors".

Where it is necessary to convert United States dollars ("US$" or "USD") to Canadian dollars ("CAD"), for comparative purposes, the prevailing exchange rate posted by the Bank of Canada on February 28, 2025 (being CAD$1 - US$0..6926) is used.

On July 27, 2023, Shelfie effected a 1 for 5,294 forward stock -split of its Common Shares (as hereinafter defined) and on April 15, 2024, Shelfie completed a share consolidation of its Common Shares on a 3.96901:1 basis. On October 8, 2024, Shelfie effected a 1-for-1.0004 forward stock split of its Common Shares. All Common Share and per Common Share amounts have been retroactively restated for all periods presented.

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TABLE OF CONTENTS
(continued)

Page

GLOSSARY ... 3
GENERAL MATTERS ... 7
FORWARD-LOOKING STATEMENTS ... 7
FINANCIAL STATEMENT PRESENTATION IN THIS PROSPECTUS ... 10
PROSPECTUS SUMMARY ... 11
CORPORATE STRUCTURE ... 17
GENERAL DEVELOPMENT OF THE BUSINESS ... 17
NARRATIVE DESCRIPTION OF THE BUSINESS ... 25
SHELFIE SYSTEM ... 27
MARKET OPPORTUNITY & COMPETITION ... 33
BUSINESS OBJECTIVES, STRATEGY AND MILESTONES ... 37
USE OF AVAILABLE FUNDS ... 42
DIVIDEND POLICY ... 44
NOTEWORTHY FEATURES OF ISRAELI CORPORATE LAW ... 44
SELECTED FINANCIAL INFORMATION ... 62
DESCRIPTION OF SHARE CAPITAL ... 63
CONSOLIDATED CAPITALIZATION ... 64
PRIOR SALES ... 65
ESCROWED SECURITIES ... 65
PRINCIPAL SHAREHOLDERS ... 66
MANAGEMENT ... 66
EXECUTIVE COMPENSATION ... 72
AUDIT COMMITTEE ... 80
CORPORATE GOVERNANCE ... 83
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS ... 88
SHAREHOLDER RIGHTS, DIRECTORS' OBLIGATIONS A COMPARATIVE LAW SUMMARY
... 88
PLAN OF DISTRIBUTION ... 97
RISK FACTORS ... 98
Industry Specific Risks ... 98
Risks Relating to the Corporation’s Business ... 105

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TABLE OF CONTENTS
(continued)

Page

Risks Related to the Ownership of the Common Shares ... 114
COVID-19 ... 117
Risks Related to the Company’s Operations in Israel ... 118
PROMOTERS ... 121
LEGAL PROCEEDINGS AND REGULATORY ACTIONS MATTERS ... 121
INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ... 122
EXEMPTIONS FROM PROSPECTUS REQUIREMENTS ... 122
AUDITORS, TRANSFER AGENT AND REGISTRAR ... 122
CONTRACTUAL RIGHTS OF RESCISSION OF SUBSCRIPTION RECEIPT HOLDERS ... 123
MATERIAL CONTRACTS ... 123
EXPERTS ... 124
SCHEDULE A FINANCIAL STATEMENTS ... 1
SCHEDULE B OMNIBUS STOCK AWARD PLAN ... 1
SCHEDULE C EXECUTIVES & DIRECTORS COMPENSATION POLICY ... 1
SCHEDULE D AUDIT COMMITTEE CHARTER ... 1
SCHEDULE E DISCLOSURE AND INSIDER TRADING POLICY ... 1
SCHEDULE F CODE OF BUSINESS CONDUCT AND ETHICS ... 1

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GLOSSARY

"Affiliate" a company is an "Affiliate" of another company if (a) one of them is the subsidiary of the other, or (b) each of them is controlled by the same Person. A company is "controlled" by a Person if (a) voting securities of the company are held, other than by way of security only, by or for the benefit of that Person, and (b) the voting securities, if voted, entitle the Person to elect a majority of the directors of the company. A Person beneficially owns securities that are beneficially owned by (a) a company controlled by that Person, or (b) an Affiliate of that Person or an Affiliate of any company controlled by that Person.

"AI" means advanced machine learning and image processing algorithms, which in the case of Shelfie are used to analyze the images of items/products, stocked in a retail setting, to determine the number of items/products existing on a specific shelf of a specific customer, in order to calculate the required number of items to be restocked.

"Associate" when used to indicate a relationship with a Person, means (a) an issuer of which the Person beneficially owns or controls, directly or indirectly, voting securities entitling him to more than 10% of the voting rights attached to all outstanding voting securities of the issuer; (b) any partner of the Person; (c) any trust or estate in which the Person has a substantial beneficial interest or in respect of which the Person serves as trustee or in a similar capacity; (d) in the case of a Person who is an individual; (i) that Person's spouse or child, or (ii) any relative of that Person or of his spouse who has the same residence as that Person.

"Audit Committee" means the Audit Committee of the Corporation which complies with National Instrument 52-110 "Audit Committees" and in accordance with the Israeli Companies Law.

"Awards" means Options and/or RSUs.

"Board of Directors" or "Board" means the board of directors of the Corporation.

"CEO" means chief executive officer.

"CFO" means chief financial officer.

"Common Shares" means the ordinary shares with par value of 0.0000075 New Israeli Shekel in the capital of the Corporation.

"Control Person" means any Person that holds or is one of a combination of Persons that holds, a sufficient number of any of the securities of an issuer so as to affect materially the control of that issuer, or that holds more than 20% of the outstanding voting securities of an issuer, except where there is evidence showing that the holder of those securities does not materially affect the control of the issuer.

"Controlling Shareholder" means as defined in the Israeli Companies Law as a shareholder with the ability to direct the activities of a company, other than by virtue of being a director or holding any other position with such company. A shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the "means of control" in the company. Provided that with respect

to certain matters, a controlling shareholder is deemed to include a shareholder that holds 25% or more of the voting rights in a company if no other shareholder holds more than 50% of the voting rights in the company.

"Corporation", "Company" or "Shelfie" means Shelfie-Tech Ltd., a corporation incorporated under and governed by the laws of the State of Israel.

"CSE" means the Canadian Securities Exchange.

"Escrow Agent" means Olympia Trust Company.

"Escrow Agreement" means an escrow agreement entered into among certain securityholders of the Corporation and Olympia Trust Company, as escrow agent, dated as of November 21, 2024.

"External Director" means a director that is qualified and elected as an "external director" under the Israeli Companies Law.

"Financial Statements" has the meaning set out under "Financial Statement Presentation In This Prospectus".

"IFRS" means International Financial Reporting Standards.

"Independent Director" shall mean a director that is independent within the meaning of NI 52 -110.

"Insider" means if used in relation to an issuer, means: (a) a director or senior officer of the issuer; (b) a director or senior officer of a company that is an Insider or subsidiary of the issuer; (c) a Person that beneficially owns or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the issuer; or (d) the issuer itself if it holds any of its own securities.

"Intellectual Property" means all trade or brand names, business names, trademarks, service marks, copyrights, patents, patent rights, licenses, industrial designs, know-how (including trade-secrets and other unpatented or unpatentable proprietary or confidential information, systems, or procedures), computer software, inventions, designs and other industrial or intellectual property of any nature whatsoever.

"Israeli Companies Law" or "Companies Law" means the Israeli Companies Law 5759-1999, as amended.

"Israeli Related Parties" means for purposes of related party transactions under the Israeli Companies Law- (a) an Office holder; (b) a Controlling Shareholder; (c) another person/entity in which the Controlling Shareholder or the Office Holder has personal interest in engaging with him/it; (d) a Relative (i.e., a spouse, sibling, parent, grandparent or descendant, a spouse's sibling, parent or descendant and the spouse of each of the foregoing persons) of a Controlling Shareholder; (e) a corporation controlled by a Controlling Shareholder. An "Office Holder" is defined under the Israeli Companies Law as a general manager (i.e., Chief Executive Officer), chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these

positions regardless of that person’s title, a director and any other manager directly subordinate to the general manager.

“Lion Orlitzky” means Lion, Orlitzky & Co, Certified Public Accountants (Israel).

“Listing Date” means the date that the Common Shares are posted and listed for trading on the CSE.

“Management” means the management of the Corporation.

“Means of Control” is defined under the Israeli Companies Law as voting rights in a company’s general meeting or the right to appoint the directors of the company or its general manager.

“MD&A” means Management’s Discussion and Analysis included in this Prospectus.

“Named Executive Officers” or “NEOs” means the Corporation’s CEO and CFO and the next most highly compensated executive officer of the Corporation whose total compensation is more than $150,000.

“NI 52-110” has the meaning set out under the heading “Corporate Governance – Board of Directors”.

“NI 58-101” means National Instrument 58-101 Disclosure of Corporate Governance Practices.

“NP 46-201” means National Policy 46-201 Escrow for Initial Public Offerings.

“NP 58-201” means National Policy 58-201 Corporate Governance Guidelines.

“OBCA” means the Business Corporations Act (Ontario).

“Omnibus Compensation Plan” has the meaning ascribed thereto under the heading “Description of Share Capital – Awards”.

“Options” means stock options to purchase securities of the Corporation issued under the Omnibus Compensation Plan.

“Person” means a company or an individual.

“Principal” means:

a) a person or company who acted as a promoter of the Corporation within two years before the prospectus;

b) a director or senior officer of the Corporation or any of its material operating subsidiaries at the time of the prospectus;

c) a 20% holder – a person or company that holds securities carrying more than 20% of the voting rights attached to the Corporation’s outstanding securities immediately before and immediately after the Corporation’s listing on the CSE;

d) a 10% holder – a person or company that

a. holds securities carrying more than 10% of the voting rights attached to the Corporation’s outstanding securities immediately before and immediately after the listing on the CSE; and

b. has elected or appointed, or has the right to elect or appoint, one or more directors or senior officers of the issuer or any of its material operating subsidiaries.

“Promoter” has the meaning ascribed thereto in the Securities Act.

“Related Party” means a person, other than a person that is solely a bona fide lender, that, at the relevant time and after reasonable inquiry, is known by the Corporation or a director or senior officer of the Corporation to be: (a) a Control Person of the Corporation; (b) a person of which a person referred to in paragraph (a) is a Control Person; (c) a person of which the Corporation is a Control Person; (d) a person that has (i) beneficial ownership of, or control or direction over, directly or indirectly, or (ii) a combination of beneficial ownership of, and control or direction over, directly or indirectly, securities of the Corporation carrying more than 10% of the voting rights attached to all the Corporation’s outstanding voting securities, (e) a director or senior officer of (i) the Corporation, or (ii) a person described in any other paragraph of this definition, (f) a person that manages or directs, to any substantial degree, the affairs or operations of the Corporation under an agreement, arrangement or understanding between the person and the Corporation, including the general partner of a Corporation that is a limited partnership, but excluding a person acting under bankruptcy or insolvency law, (g) a person of which persons described in any paragraph of this definition beneficially own, in the aggregate, more than 50 per cent of the securities of any outstanding class of securities, (h) an affiliated entity of any person described in any other paragraph of this definition, (i) a Promoter of the Corporation; And Israeli Related Parties;

“Related Party Transaction” has the meaning given to that term in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions or as detailed under the Israeli Companies law (for further information see “Noteworthy Features of Israeli Corporate Law”). The CSE may deem a transaction to be a Related Party Transaction when the transaction involves Non-Arm’s Length Parties, or other circumstances exist which may compromise the independence of the issuer with respect to the Transaction.

“Restricted Share Release Conditions” means: (a) the receipt by the Corporation of a final receipt from the Ontario Securities Commission (or such other securities regulator as the Corporation selects as its principal regulator) for a final long form prospectus qualifying the Common Shares; and (b) the Corporation being conditionally approved for listing on the CSE.

“RSUs” means restricted share units issued under the Omnibus Compensation Plan.

“Securities Act” means the Securities Act (RSO 1990, c S.5).

"Subscription Receipts" means 1,864,617 rights to be automatically converted, for no additional consideration, into an equal number of Common Shares upon fulfillment of the Restricted Share Release Conditions.

"Transfer Agent Agreement" means the Transfer Agent, Registrar and Disbursing Agent Agreement" means the agreement entered into between Olympia Trust Company, as transfer agent and the corporation dated as of November 19, 2024.

"U.S." means the United States of America.

GENERAL MATTERS

Unless otherwise noted or the context indicates otherwise, "we", "us", "our", the "Corporation", the "Company" or "Shelfie" refer to Shelfie-Tech Ltd.

Prospective purchasers should rely only on the information contained in this Prospectus. We have not authorized any other person to provide prospective purchasers with additional or different information. If anyone provides prospective purchasers with additional or different or inconsistent information, including information or statements in media articles about the Corporation, prospective purchasers should not rely on it. The Corporation is not making an offer to sell or seeking offers to buy shares or other securities of the Corporation. Prospective purchasers should assume that the information appearing in this Prospectus is accurate only as at its date, regardless of its time of delivery. Shelfie's business, financial conditions, results of operations and prospects may have changed since that date.

The Corporation presents its financial statements in U.S. dollars. Amounts in this Prospectus are stated in Canadian dollars unless otherwise indicated.

Certain capitalized terms and phrases used in this Prospectus are defined in the "Glossary".

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain statements which may constitute "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities law requirements (collectively, "forward-looking statements"). The forward-looking statements are contained principally in the sections entitled "Prospectus Summary", "Business Objectives, Strategy and Milestones", "Management's Discussion and Analysis" and "Risk Factors". These forward-looking statements are made as of the date of this Prospectus and the Corporation does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities law. Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "projects", "proposes", "potential" "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and

other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The Corporation provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Certain forward-looking statements in this Prospectus include, but are not limited to, statements regarding:

successfully executing its plans and intentions, including with respect to the operation of the Corporation’s business and generation of revenues and sales of its products;
anticipated cash needs and additional financing, including the ability to obtain additional funds through the sale of equity or debt commitments or the factoring of receivables or otherwise;
future revenue, expenses and operations;
production and expansion plans at our facilities and the capacity thereof;
the Corporation’s expected business objectives for the next twelve months;
the outcome of research and development;
expectations regarding production and costs;
treatment under government regulatory and taxation regimes;
future product offerings;
the Corporation’s ability to attract and retain skilled staff; and
the Corporation’s competitive position in which the Corporation operates.

Forward-looking statements are based on certain assumptions and analyses made by the Corporation in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate and are subject to risks and uncertainties. In making the forward-looking statements included in this Prospectus, the Corporation has made various material assumptions, including but not limited to assumptions related to: (i) the availability of financing at all or on reasonable terms; (ii) the Corporation’s ability to successfully execute its plans and intentions; (iii) general business and economic conditions, particularly in the retail food markets; (iv) regulation of the markets in which we operate; (v) the Corporation’s ability to attract and retain skilled staff; (vi) market competition, including the products and technology offered by the Corporation’s competitors; and (vii) maintenance of our current positive relationships with our suppliers, service providers and other third parties. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and we cannot assure that actual results will be consistent with these forward-looking statements. Whether actual results, performance or achievements will conform to the Corporation’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those listed under “Risk Factors”, which include:

the Corporation’s ability to raise required additional capital through the sale of equity or debt instruments or the factoring of receivables or otherwise;
the Corporation has a limited operating history;
the Corporation may be unable to achieve revenue growth and development;
there are factors which may prevent the Corporation from the realization of growth targets;
the Corporation’s actual financial position and results of operations may differ materially from the expectations of the Corporation’s management;
the Corporation may incur significant ongoing costs and obligations related to its investment in infrastructure, growth, research and development, regulatory compliance and operations;
there is no assurance that the Corporation will turn a profit or generate immediate revenues;
the size of the Corporation’s target market is difficult to quantify, and investors will be reliant on their own estimates on the accuracy of market data;
the Corporation is subject to changes in laws, regulations and guidelines which could adversely affect the Corporation’s future business, financial condition and results of operations;
the Corporation’s business is dependent on key supply chains which could be adversely disrupted by a number of factors including, among others, major health issues or pandemics;
any failure on the Corporation’s part to comply with applicable regulations could prevent it from being able to carry on its business and there may be additional costs associated with any such failure;
the Corporation may not be able to develop its products, which could prevent it from ever becoming profitable;
if the Corporation is unable to develop and market new products it may not be able to keep pace with market developments;
consumer preferences may change and the Corporation may be unsuccessful in retaining customer;
if the Corporation is unable to attract and retain key personnel, it may not be able to compete effectively in the retail market;
the Corporation may seek to enter into strategic alliances including contractual relationships, joint ventures, selective acquisitions, licensing arrangements or other relationships, or expand the scope of currently existing relationships, with third parties that the Corporation believes will have a beneficial impact, and there are risks that such strategic alliances or expansions of the Corporation’s currently existing relationships may not enhance its business in the desired manner;
the Corporation’s quality control systems may not operate effectively;
the Corporation may become subject to litigation in the ordinary course of business;
the Corporation will be reliant on information technology systems and may be subject to damaging cyber-attacks;

the Corporation may be exposed to liability or the threat of liability in relation to the use of customer information and other personal and confidential information;
the Corporation may be subject to risks related to the protection and enforcement of its intellectual property rights, or intellectual property it licenses from others, and may become subject to allegations that it or its licensors are in violation of intellectual property rights of third parties;
the Corporation may incur additional indebtedness;
management may not be able to successfully implement adequate internal controls over financial reporting;
if the Corporation has a material weakness in its internal controls over financial reporting, investors could lose confidence in the reliability of the Corporation’s financial statements, which could result in a decrease in the value of its securities;
the Corporation has negative operating cash flow;
the Corporation may be subject to credit risk;
tax and accounting requirements may change in ways that are unforeseen to the Corporation and it may face difficulty or be unable to implement or comply with any such changes;
the Corporation may not be able to renew or secure adequate insurance to protect its assets, operations and employees;
the price of the Common Shares in public markets may experience significant fluctuations;
if securities or industry analysts do not continue to publish research, or publish inaccurate or unfavourable research, about the Corporation’s business, the Common Share price and trading volume could decline;
the Corporation continues to sell shares for cash to fund operations, expansion, and mergers and acquisitions that will dilute the current shareholders;
it is not anticipated that any dividends will be paid to holders of Common Shares for the foreseeable future; and
the Corporation is subject to ongoing reporting requirements under applicable securities laws and exchange policies.

FINANCIAL STATEMENT PRESENTATION IN THIS PROSPECTUS

The audited financial statements for the Corporation for the years ended December 31, 2022 and 2023 and the unaudited interim financial statements for the three and nine month periods ending September 30, 2024 and the notes of each thereon (the “Financial Statements”) prepared in accordance with IFRS together with corresponding Management’s Discussion and Analysis have been included at Schedule “A” in this Prospectus.

PROSPECTUS SUMMARY

The following is a summary of the principal features of this Prospectus and should be read together with the more detailed information and financial data and statements contained elsewhere in this Prospectus.

Description of Business

Shelfie was incorporated under the laws of the State of Israel on November 18, 2021 under the name Shelfie-Tech Ltd. Shelfie has incurred over US$1,900,000 in research and development (“R&D”) costs building the patent-pending Shelfie platform and has raised approximately US$2,870,000 in equity financings.

Shelfie is a technology company focused on providing shelf inventory management technological solutions for the retail industry, in particular for large grocery stores and supermarkets.

Using patent-pending technology, Shelfie’s technological solution includes a robotic retail shelf monitoring system which uses its self developed proprietary software that utilizes machine learning and image processing algorithms to automatically optimize shelf inventory management which Shelfie believes will enhance customer experience. In addition, a mobile software real-time application developed by Shelfie (“App”) is expected to enable supermarket employees to restock products in a more timely manner as a result of the “on time” information being communicated to them. Shelfie has completed the production of a working prototype for its product and the App and therefore has already incurred a significant portion of its required R&D to bring the product to commercialization. See “Narrative Description of the Business – Summary”.

Consultants, Directors and Officers

As of the date of this Prospectus, the Corporation has no employees, rather it is managed by consultants who are not employed by the Corporation and outsources to third parties for services it requires. See “Management – Consultants”. The directors and officers of the Corporation include the following individuals:

Ben Tsur Joseph – Director, Chief Executive Officer and Chair of the Board
Alan Rootenberg – Chief Financial Officer and director
Lilach Lotan – Independent Director, Audit Committee
Yehudit Halpern – Independent Director and designated to be appointed as External Director by the Company’s shareholders in a general meeting to be sought within three months following the listing of the Company’s shares under this prospectus, Chair of the Audit Committee
Zaler Mordchai Salom Iosf – Independent Director

Haim Alkoby – Independent Director, and designated to be appointed as External Director by the Company’s shareholders in a general meeting to be sought within three months following the listing of the Company’s shares under this prospectus Audit Committee

For more information on the Corporation’s directors and executive officers see “Management – Directors and Executive Officers.”

Qualification of Underlying Securities

This Prospectus qualifies the distribution of 1,864,617 Common Shares issuable upon the exercise or automatic conversion of the previously issued Subscription Receipts upon fulfillment of the Restricted Share Release Conditions. See “Plan of Distribution”.

Listing

The Corporation has applied to the CSE for the listing of the Common Shares on the CSE. The listing on the CSE is subject to the Corporation fulfilling all the listing requirements of the CSE.

Risk Factors

An investment in the Common Shares should be considered highly speculative and involves a substantial degree of risk, and investors may incur a loss on their investment. The risks, uncertainties and other factors, many of which are beyond the control of the Corporation, that could influence actual results include, but are not limited to:

the Corporation is subject to industry regulatory risks;
the Corporation may be exposed to liability or the threat of liability in relation to the use of customer information and other personal and confidential information;
the Corporation may fail to retain existing customers or add new customers;
the Corporation depends on suppliers and skilled labour;
the Corporation will rely on third-party owned communication networks;
the Corporation will be reliant on information technology systems and may be subject to damaging cyber-attacks;
the Corporation may be subject to risks that may arise from being unable to safeguard its technology and brand;
the Corporation may be subject to risks related to the protection and enforcement of its intellectual property rights, or intellectual property it licenses from others, and may become subject to allegations that it or its licensors are in violation of intellectual property rights of third parties;
the Corporation has a limited operating history;

the Corporation’s operating results may fluctuate;
the Corporation may have difficulty obtaining additional funding;
the Corporation operates under intensely competitive conditions;
the Corporation relies upon its management and certain key personnel;
the Corporation’s business requires specialized knowledge and skill;
the Corporation’s products may be subject to software product defects;
the Corporation’s product are acquired or licensed from third party vendors;
conflicts of interest may arise;
changes in the political environment may create regulatory risks;
foreign exchange rates may fluctuate;
sales to foreight customers are subject to anti-corruption and bribery laws;
the Corporation may require substantial capital in the future;
the Corporation may be unable to achieve revenue growth and development;
there are factors which may prevent the Corporation from realization of growth targets;
the Corporation’s actual financial position and results of operations may differ materially from the expectations of the Corporation’s management;
the Corporation may incur significant ongoing costs and obligations related to its investment in infrastructure, growth, regulatory compliance and operations;
the size of the Corporation’s target market is difficult to quantify, and investors will be reliant on their own estimates on the accuracy of market data;
the Corporation’s business is dependent on key supply chains which could be adversely disrupted by a number of factors including, among others, major health issues or pandemics;
the Corporation may not be able to develop its products, which could prevent it from ever becoming profitable;
the Corporation may seek to enter into strategic alliances including contractual relationships, joint ventures, selective acquisitions, licensing arrangements or other relationships, or expand the scope of currently existing relationships, with third parties that the Corporation believes will have a beneficial impact, and there are risks that such strategic alliances or expansions of the Corporation’s currently existing relationships may not enhance its business in the desired manner;
the Corporation may not be able to successfully identify and execute future acquisitions or dispositions or successfully manage the impacts of such transactions on its operations;

the Corporation’s quality control systems may not operate effectively;
the Corporation may become subject to litigation in the ordinary course of business;
the Corporation may incur additional indebtedness;
management may not be able to successfully implement adequate internal controls over financial reporting;
if the Corporation has a material weakness in its internal controls over financial reporting, investors could lose confidence in the reliability of the Corporation’s financial statements, which could result in a decrease in the value of the Corporation’s securities;
the Corporation has negative operating cash flow;
the Corporation may be subject to credit risk;
tax and accounting requirements may change in ways that are unforeseen to the Corporation and it may face difficulty or be unable to implement or comply with any such changes;
the Corporation may not be able to renew or secure adequate insurance to protect its assets, operations and employees;
the price of securities in public markets may experience significant fluctuations;
there is a significant share liquidity risk;
if securities or industry analysts do not continue to publish research, or publish inaccurate or unfavourable research, about the Corporation’s business, the Common Share price and trading volume could decline;
the Corporation continues to sell shares for cash to fund operations, expansion, and mergers and acquisitions that will dilute the current shareholders;
it is not anticipated that any dividends will be paid to holders of Common Shares for the foreseeable future;
the Corporation is subject to ongoing reporting requirements under applicable securities laws and CSE policies;
the Company’s business is subject to risks arising from a widespread outbreak of an illness or any other communicable disease, or any other public health crisis, such as the COVID-19 pandemic, which has impacted and could continue to impact the business;
the Company’s principal offices and customers are located in Israel and, therefore, the business, financial condition and results of operation may be adversely affected by political, economic and military instability in Israel;
the Company’s operations may be disrupted as a result of the obligation of management or key personnel to perform military service;

it may be difficult to enforce a judgment of a Canadian court against the Company, certain of the Company's officers and directors or the Israeli experts named in this Annual Report are in Israel, to assert Canadian securities laws claims in Israel or to serve process on certain of the officers and directors and these experts;
the Company may become subject to claims for payment of compensation for assigned service inventions by the Company's current or former employees, which could result in litigation and adversely affect the business;
part of the Corporation's operations are conducted in Israel and conditions in Israel, including the recent attack by Hamas and other terrorist organizations and Israel's war against them, may affect the Corporation's operations.

See "Risk Factors" for additional discussion of the foregoing risks and additional risk factors.

Financial Information

The following selected financial information has been derived from and is qualified in its entirety by the Financial Statements and notes thereto included in Schedule "A" to this Prospectus, and should be read in conjunction with such Financial Statements and the related notes, along with the management's discussion and analysis relating to such Financial Statements and also included in Schedule "A". All financial statements of the Corporation have been prepared in accordance with IFRS.

The following sets out selected summary financial information of the Corporation for the years ended December 31, 2022 and December 31, 2023 and for the nine month period ending September 30, 2024:

	Year ended December 31, 2022 (audited)	Year ended December 31, 2023 (audited)	For the nine-month period ended September 30, 2024 (unaudited)
	US$	US$	US$
Revenue	-	-	-
Total Expenses	1,099,908	589,144	80,535
Net loss	1,099,908	589,144	80,535
Current assets	351,887	105,885	98,033
Total assets	351,887	105,885	98,033
Current liabilities	215,523	340,780	371,112
Total liabilities	215,523	340,780	371,112
Shareholders’ equity (deficiency)	136,364	(234,895)	(273,079)

Use of Available Funds

The Corporation is not raising any funds in conjunction with this Prospectus and, accordingly, there are no proceeds to be raised by the Corporation pursuant to this Prospectus.

As at the date of this Prospectus, the Corporation has cash and cash equivalents of approximately US$1,522,000⁽¹⁾ and approximately US$1,172,000 in working capital⁽²⁾ (US$1,180,000 as of March 31, 2025). The Corporation’s expected monthly cash burn rate is equal to approximately US$50,000 based on its intention to allocate the foregoing funds as follows over the course of the next 12 month period; however, it reserves discretion to allocate to other strategic, operational or other demands as and when they arise:

Use of Available Funds	Amount (US$)
Costs related to public listing^{(3)}	$100,000
Research & Development^{(4)}	$324,000
Selling & Marketing costs^{(5)}	$55,000
General and administrative costs^{(6)}	$121,000
Total Use of Funds	$600,000
Unallocated working capital^{(7)}	$580,000
Total:	$1,180,000

Notes:

(1) Of this amount of cash and cash equivalents, are approximately US$1,231,000 received from investors pursuant to the Restricted Share Release Conditions (“Restricted Funds”). The Restricted Funds are in respect of subscription receipts to issue 1,864,617 Shares at $0.66 per share. The Restricted Funds will be released by the Company upon fulfillment of the Restricted Share Release Conditions.

(2) Working Capital is calculated as current assets less current liabilities and excludes the prepaid expenses balance in the September 30, 2024 condensed interim financial statements, as this prepaid expense was charged to the Corporation’s statement of comprehensive loss during the fourth quarter of 2024 as the service was provided during this period.

(3) This forward-looking statement is based on the following material factors and assumptions: (a) that the costs of professional fees (legal and audit) transfer agent fees, CSE listing fees and other regulatory filing fees will not change from those fixed pursuant to regulatory policies or in the case of service providers pursuant to fixed cost agreements.

(4) See “Use of Available Funds” for a detailed breakdown of Research and Development Costs.

(5) This forward-looking statement is based on the following material factors and assumptions: (a) the Corporation assumes that it will attend up to three industry exhibitions [in the upcoming year; and (b) the fees will be materially similar to fees paid by the Corporation for its attendance at two industry exhibitions previously attended which amounts were $40,000 in the aggregate (c) the Corporation assumes it will not be necessary to engage any investor relation persons in the next twelve months.

(6) This forward-looking statement is based on the following material factors and assumptions: (a) costs of: office rental, ongoing professional fees (legal and accounting) and CFO compensation will remain the same throughout the next twelve months as agreed to with the aforementioned third parties; and (b) the CEO’s agreement that no salary will be paid to, or incurred by, the CEO until such time as the Corporation has raised an additional US$1,000,000 post the Listing Date.

(7) The cash portion of the unallocated working balance has been held in short-term, investment grade, interest-bearing securities, in government securities or in bank accounts at the discretion of management.

See “Use of Available Funds.”

CORPORATE STRUCTURE

Name, Address and Incorporation

Shelfie was incorporated under the laws of the State of Israel on November 18, 2021 under the name Shelfie-Tech Ltd. Shelfie’s registered and records office is located at Avital 13, Tel Aviv, Israel, and its principal place of business is located at Yigal Alon St 94, Tel Aviv, Israel.

Intercorporate Relationship

Shelfie currently has no subsidiaries.

GENERAL DEVELOPMENT OF THE BUSINESS

History

Shelfie was incorporated under the laws of the State of Israel on November 18, 2021 under the name Shelfie-Tech Ltd. Shelfie has incurred over US$1,900,000 in research and development costs building the patent-pending Shelfie platform and has raised approximately US$2,870,000 in equity financings.

Shelfie is a technology company focused on providing shelf inventory management technological solutions for the retail industry, in particular for large grocery stores and supermarkets.

Using patent-pending technology, Shelfie’s technological solution includes a robotic retail shelf monitoring system which uses self developed proprietary software that utilizes machine learning and image processing algorithms to automatically optimize shelf inventory management whose goal is to provide an enhanced customer experience. In addition, the App is expected to enable supermarket employees to restock products in a more timely manner as a result of the “on time” information being communicated to them. Shelfie has completed the production of a prototype. and the App and therefore has already incurred a significant portion of its expected required R&D to bring the product to commercialization.

Prior Financings

The following table summarizes details of the Common Shares issued by the Corporation during the 12-month period prior to the date of this Prospectus.

Date Of Issuance	Description of Transaction	Price per Security	Number of Securities
January 1, 2023 to January 25, 2023	Issuance of Common Shares in a private placement	US$1.00	60,256
September 30, 2023	Issuance of Common Shares in a private placement	US$0.66	237,897
April 10, 2024	Issuance of Common Shares pursuant to compensation for lower valuation	US$0.66	144,622

June 18, 2024	Issuance of Common Shares in a private placement	US$0.65	65,548
November- December, 2024	Issuance of Subscription Receipts	US$0.66	1,792,469
December, 2024	Issuance of Common Shares in a private placement	US$0.66	909,092
January, 2025	Issuance of Subscription Receipts	US$0.66	72,148

Intellectual Property

Three patent-pending applications have been filed in the United States under the following reference applications:

(1) 63/238,163, 29.8.2021 (expired on 29.8.2022);
(2) 63/303,178, 26.1.2022 (expired on 26.1.2023); and
(3) 18/688,342, 29.2.2024 (application will expire on 29.8.2042 assuming (1) patent is granted; and (2) all maintenance fees are paid on time.

As of the date of this prospectus patent- pending applications (1) and (2) above have expired.

One international patent-pending application was filed in Israel under the following reference application (the "PCT Application"):

(1) International Patent Application No. PCT/IL2022/050942. Form PCT/IB/301 Notification of Receipt of Record Copy, issued on September 9, 2022 informing that the International Bureau has received a record copy of the international application (i), in the name of applicant: SHELFIE-TECH LTD. See “Shelfie System – Intellectual Property”.

As of the date of this prospectus international patent- pending applications (1) above has expired on 29.2.2024.

One patent-pending application have been filed in Europe under the following reference application:

(1) 22773032.2, 25.3.2024 (application will expire on 29.8.2042 assuming (1) patent is granted; and (2) all maintenance fees are paid on time).

U.S. Patent Application 18/688,342, (29.2.2024) and European Patent Application 22773032.2, (25.3.2024) are pending and cover the following:

“an automatic inventory shelf monitoring system for monitoring product inventory in a shelf unit, which includes:

○ a camera designed to capture an image of the entire product on all shelves within the said shelf unit;
○ transportation system designed to transfer the image capture system along the shelf unit; and
○ computerized system that includes processor and memory.

The transportation system is installed on the shelf unit and the computerized system is designed to receive images taken by the image capture system, analyze it, determine the number of units of each product on each shelf of shelf unit, and provide its output.”

In the United States, examination has not started yet, no payments are currently due.

In Europe, examination has not started yet. Renewal fees, in the amount of approximately US$1,400 are due by August 29, 2025.

US and European patent applications are pending because the examination by the US and European Patent Offices have not yet commenced. The applications are expected to be granted following the approval of the applicable jurisdictional examiner and payment of the allowance and grant fees in the aggregate amount of US$16,000.

In order to establish reasonable grounds to conclude that Shelfie’s patent pending applications do not infringe on third party intellectual property rights Shelfie conducted the following patent searches:

(1) A formal search and written opinion by the European Patent Office, acting as an International Searching Authority for the PCT Application. In the International Search Report and Written Opinion (“WO”) issued on March 9, 2023, for the PCT Application, the following documents were cited by the Examiner:

D1 US 2021/0133835;
D2 US 2018/0225625;
D3 US 2017/0286901;
D4 US 2020/0005225.

In the WO the PCT Examiner found certain claims to be novel in view of the prior art.

In response, the claims were amended two the current patent applications in order to overcome the rejections found in the WO.

(2) A research of existing patents (including those believed to be held by competitors):

Patent No.	Scope Of Patent	Shelfie Product vs. Patent
Product Fixture Monitoring System Using Physical Sensors Pub. Nu.: US2007/0273513A1	This patent describes a sensor-based monitoring system that tracks the status of products on retail shelves. It utilizes physical sensors attached to shelves, which send data to an FMS-IC controller to detect stock depletion, rapid product removal, or low inventory levels. The system then alerts store personnel in real time.	Shelfie's system shares the general objective of inventory monitoring and out-of-stock prevention, it employs a completely different technological approach. Instead of relying on physical sensors attached to shelves, Shelfie utilizes a mobile camera-based system combined with AI-powered image analysis.
Shelf Inventory Monitoring via Track Systems and Pushers Pub. Nu.: US8,260,456B2	This patent introduces a track-based inventory monitoring system, in which each shelf is equipped with pushers and sensors that detect product positioning. The system continuously monitors pusher movement to determine product availability and reports this data to a central inventory management system.	Shelfie's technology is fundamentally different in that it does not use mechanical pushers or shelf-mounted sensors. Instead, it employs a mobile camera system mounted on rails that scans the shelves visually, analyzing product counts via computer vision and AI. While both systems serve the same function of inventory tracking, the underlying method of data collection is distinct.
Weight Sensor-Based Out-of-Stock Detection Pub. Nu.: US9,275,361B2	This patent describes a weight sensor-based system for inventory tracking, where shelf-integrated sensors measure changes in product weight to determine stock levels. The system provides real-time data regarding stock availability, misplaced items, or anticipated out-of-stock scenarios.	Compared to Shelfie's approach, which relies entirely on visual data acquisition and AI-driven image processing, this weight-based system operates on a completely different principle. Shelfie's technology does not involve weight measurement, electrical sensors embedded in shelves, or real-time weight tracking mechanisms.

| Goods Shelf with Weight Sensing Function
Pub. Nu.: CN 108703590 B | This patent describes a goods shelf with an integrated weight sensing system, which includes a shelf bracket, a detachable mounting bracket, a weight-sensing device, and an adjustable tray. The system is designed to monitor the real-time weight of items placed on the shelf, detect weight changes on each tray, and provide inventory tracking based on these measurements. One of the key features is the adjustable width of the tray, allowing flexibility for different product sizes while maintaining continuous weight monitoring. | Shelfie’s vision-based monitoring system differs significantly from this technology. While both systems aim to track inventory and detect stock levels, their underlying mechanisms are entirely different:
• This patent relies on weight sensors to detect product availability, whereas Shelfie employs image recognition and AI-based object detection.
• Shelfie’s system is a mobile unit that scans shelves using cameras, while the Chinese patent describes a fixed weight-sensing tray integrated within a shelf structure.
• The adjustable tray width in this patent is unrelated to Shelfie’s vision-based tracking and does not overlap in terms of method or hardware implementation. |
| --- | --- | --- |
| System and Method for Determining Out-of-Stock Products
Pub. Nu.: US2020/0108264A1 | This patent describes an automated inventory monitoring system that utilizes image capture technology to scan and analyze retail aisles. The system captures images of store shelves, identifies product images and corresponding shelf/peg labels, and then determines product positioning based on label alignment. By analyzing the association | Key differences that distinguish Shelfie’s approach:
• Shelfie’s system is mobile, mounted on a transportation rail that actively scans shelves. In contrast, this patent does not specify a dedicated mobility mechanism for scanning but rather implies a stationary |

	between products and labels, the system detects and reports out-of-stock situations to store management.	or fixed-position imaging system. • Label association methodology: The system in this patent focuses heavily on associating products with shelf labels or peg labels, whereas Shelfie’s system relies on AI-driven object recognition that identifies products independently of label positioning. • Real-time scanning capability: Shelfie’s camera system continuously moves along the shelves, collecting image data dynamically, while this patent suggests a static image capture process, possibly requiring multiple fixed cameras or periodic scanning events. • Data processing approach: Shelfie employs an AI-based object detection system that recognizes and counts products using machine learning, whereas this patent appears to rely more on positional relationships between products and labels, which may limit adaptability in environments where product placement is less structured.
Product Tracking System Using Air Displacement Sensors	This patent describes a product tracking system that uses air displacement sensors to monitor	Shelfie’s vision-based tracking system is fundamentally different from the air displacement

Pub. Nu.: US10,354,222B2	inventory levels in a retail environment. The system measures the amount of air displaced as products are removed by customers. Sensors are strategically positioned near merchandise, and as products are taken off the shelf, the volume of air increases, triggering the sensors. Each sensor is calibrated with a maximum air displacement threshold, which, when exceeded, signals the need for restocking.	technology described in this patent. Although both patents serve the same primary function—tracking inventory levels in a retail store—the methods they employ are completely distinct: • Shelfie utilizes digital image capturing and AI-driven object recognition, whereas this patent relies on air displacement sensors to infer product removal. • The patented system described is a passive detection system, meaning it requires stationary sensors in fixed locations to measure air volume, while Shelfie’s system is mobile, actively scanning the shelves using a moving camera unit. • This patent does not rely on visual recognition, making it less adaptable to dynamic product layouts, whereas Shelfie’s AI-driven system can adapt.

Artificial Intelligence

The Shelfie product is comprised of a Shelfie developed proprietary software, that includes: system operation software, stock management software and software that enables the automatic inventory shelf monitoring system (See "General Description of the Business- Intellectual Property") to perceive and use self-learning to take the required actions to maximize the efficacy of the product shelfing requirements (the "AI Analysis").

The software developed by Shelfie to conduct the AI Analysis is programmed to achieve its goal by completing the following steps:

(1) the Shelfie product mounted on shelves captures scanned images of specific products on a specific shelf and sends them via wifi or wired connections to the computer for analysis;
(2) the software analysese the images that are received, and calculates the amount of retail products that are missing on a specific shelf in a specific location within a designated store.

The stock management software receives all information gathered from all relevant product imaging systems, and using the AI Analysis provides the user with a snapshot of the store stock status.

Additionally, the system operation software manages the operation of all robots in each store by completing the following steps:

(1) Listen and receive a 'scan' command from app, and broadcast the command to all relevant robots;
(2) monitor robots health status and alert app incase of a malfunction;
(3) send the scan results to the stock management of the retailer

There may be occasions where the AI has been found to be inaccurate or have failures. In the event of such failures or inaccuracies the Company's Software Engineer and Product Manager will use a team focused approach to address the aforementioned inaccuracies or failures on a timely basis. The amount of involvement that the Company's Software Engineer and Product Manager will have will vary from seldom and random verification of the AI results in cases where the AI had already proven to work well, to full take over in case the AI doesn't function at all (for example when new products have been introduced to the retail location, and before the AI had been retrained to support these new products).

The Product Manager has over 21 years of hands-on experience in inventing, designing and delivering vision and artificial intelligence algorithms for production and consumer products. The Product Manager has a BSc in communication system engineering as well as MSc studies in Electro Optics Engineering.

The Software Engineer has a BSc in computer engineering and has over 10 years of experience as a software engineer in the embedded field in a variety of companies, the latest as a team leader of a development team in the field of software and AI development.

The App

The App displays a dashboard for a store employee through which the employee can determine the search parameters to initiate a scan of a specific shelf or consumer product, several shelves or products or alternatively all shelves in the store. This provides the employee, with real time information

regarding the number of products which may be missing from the scanned shelves and allow the employee to issue a 'restock' request for other store employees on a real-time basis.

Ethical Issues

The AI is not expected to raise any regulatory, ethical or legal concerns due to the fact that the AI is trained on data collected from a shelf facing camera, which is a camera facing the inner side of a store shelf, meaning the Shelfie AI is not expected to train, see or understand any human data, or any personal human sensitive information such as gender, age race etc. As a shelf facing system, the Shelfie AI is trained, tested and deployed on retail product data only such that individuals frequenting stores deploying the Shelfie Product will remain anonymous to Shelfie and all users of the Product.

NARRATIVE DESCRIPTION OF THE BUSINESS

Summary

Shelfie is a technology company focused on developing and providing shelf inventory management technological solutions for the retail industry, in particular for large grocery stores and supermarkets.

Using patent pending technology, Shelfie’s technological solution includes a robotic retail shelf monitoring system which uses proprietary software that utilizes advanced machine learning and image processing algorithms to automatically optimize inventory management while ensuring an enhanced customer experience. In addition, an App ensures that supermarket employees do shelf filling efficiently and on-time. Shelfie has completed the production of a prototype and a significant portion of its expected R&D.

Market Need

In today’s competitive retail marketplace, it is vital to have the products customers want when they want them. However, according to research by Capgemini SE, 48% of consumers surveyed reported products being out of stock as a major pain point, resulting in losses of more than USD$71 billion for retailers¹.

Missing shelf items cause customers to take their shopping elsewhere, such as to on-line retailers and competing supermarkets. Estimates are that as much as 24% of Amazon’s revenue comes from customers who have not found what they were looking for at local retailers².

¹ https://www.capgemini.com/wp-content/uploads/2019/12/Report-%E2%80%93-Smart-Stores-1-1.pdf
² https://www.thingsquare.com/blog/articles/retail-wireless-shelf-monitoring/

Currently, employees monitor stock towards the end of the working day and prepare a re-stocking list. More advanced retailers transmit the counts to a central database that analyzes the data and automates the ordering of additional products.³

However, these technology-based systems still require significant levels of manual labor. With a massive number of individual Stock Keeping Units (“SKUs”) distributed across a large retail operation, any manual tasks involved with keeping on top of inventory in real time is inefficient and costly. There is a need for a cost-effective, efficient, and automated shelf monitoring system that can alert retail store management about Out of Stock items (“OOS”) so that corrective action can be taken before the shopper experience is negatively impacted.⁴

Product & Technology

Shelfie’s robotic retail shelf monitoring system is designed to take the guesswork out of shelf inventory management by improving visibility of the retail shelf supply chain.

Shelfie’s solution consists of a camera mounted on a moving pole attached to the shelf that automatically captures an image of all products on the shelf, a transportation system that moves the camera along the shelf, and a centralized management system.

The computer vision-based system uses AI Analysis to determine the number of items/products on the shelf, and calculate the required number of items to be restocked. The system can deliver item-level alerts via the App, pinpointing the exact products running low, allow for rapid remediation.

The key features include:

Suitable for multiple shelf types of any size – the unit can be mounted on a variety of shelving types, including those with fixed unmovable shelves or shelves that can be rearranged and adjusted.
Flexible image capture options – the unit can be configured to capture images at a defined time interval or a specified distance, ensuring complete coverage of the scanned shelf.
Flexible product identification options – the solution can capture an image of the barcode or use computer vision to identify the products and count the number of items on each shelf.
Unobtrusive operation – the system recognizes if a shopper is standing in the vicinity of a shelf, and can halt operation accordingly, so as not to interfere with the shopping experience.

³ https://retailtechinnovationhub.com/home/2024/8/20/improving-inventory-management-with-advanced-retail-software-solutions?utm

⁴ https://www.simoniot.com/what-are-smart-shelves-in-retail/?utm; and https://www.researchgate.net/publication/380934827_driving_retail_efficiency_with_computer_vision_detecting_empty_shelves_and_accurate_product_placement_through_planogram_integration

SHELFIE SYSTEM

Background

Retailers around the world are facing significant challenges and intensified competition due to a wide variety of factors, including: overcapacity as a result of extensive investment in new larger locations prior to 2008⁵.

Increasing popularity of online purchasing and home delivery⁶.
Strong market penetration by discount stores⁷.
Popularity of small local convenience stores⁸.

The situation is leading retailers to look closely at improving shopper experience and optimizing financial performance at the same time.

Overview

Shelfie has analyzed the processes in the retail environment and has developed a technology based solution for an automatic shelf inventory management, specifically, a robotic retail shelf monitoring system designed provide “real-time” information.

Shelfie believes the customer experience in the retail space is the basis for any profit. Lack of an item on the shelf in the competitive market, Shelfie believes, causes mistrust in the system and loss of the customer.

Shelfie uses proprietary software that utilizes advanced machine learning and image processing algorithms that analyze the images, determine the number of units on the shelf, and calculate restocks in real-time. The innovative solution consists of a camera and a centralized management system providing real-time visibility into the retail shelf supply.

Real-time alerts are delivered to management, so that corrective action can be taken before the shopper experience is negatively impacted as a result of not finding the desired product.

With Shelfie, retail operations are expected to benefit from more accurate forecasting, higher sales, lower operational costs, better “fair share of shelf” for products and brands, and greater customer satisfaction and store loyalty.

⁵ https://en.wikipedia.org/wiki/Retail_apocalypse
⁶ https://www.cegid.com/global/blog/top-6-current-challenges-for-retailers-and-their-stores
⁷ https://www.wsj.com/business/retail/big-retail-gets-bigger-as-smaller-players-struggle-01f81424
⁸ https://www.itsallgoodsinc.com/insights/challenges-facing-convenience-stores?utm_source=chatgpt.com

Detailed Description

Shelfie provides an automatic system for monitoring products' inventory on a shelf unit. The system comprises:

Cameras designed to capture an image of all products on all the shelves within the shelf unit. Identification is carried out by any suitable means, such as computer vision to identify and differentiate between individual items of the same product and so on.
Transportation System designed to move the image capturing system along the shelf unit. The image capturing units are mounted along rails and moved using various power sources. There may be multiple image capturing units, depending on the desired configuration.
Computerized System comprising a processor and a memory, which receives images taken by the image capturing system, analyzes them, determines the number of units of each product residing on each shelf and provides inventory data output to the retailer. The computerized central system may be located away from the shelf unit and receive data from all shelves either wirelessly or via wires.

The system is designed to integrate with whatever system is used in the store for management and operational purposes.

It should be noted that:

a) The term "shelf unit" refers to a display system comprising one or more shelves. It may be a fixed unit, movable from one place to another, rigid or flexible with shelves that can be easily rearranged and adjusted to accommodate different product dimensions. Refrigerated shelves and shelves with doors/other covers, are not suitable for use with the Shelfie system.
b) The camera is designed to capture images of all the products on each shelf in the shelf unit. Any suitable image capturing unit/instrument can be used.
c) The type of camera can be varied to meet user requirements. This enables the system to obtain overlapping sections of the images to ensure complete covering of the scanned shelf.
d) Certain products such as those products that are not bundled and sold by weight (i.e. nuts, fruits, vegetables etc.) are not suitable for use with the Shelfie system.

Identifying each product on each shelf and at each location on the shelf can be facilitated in many different ways.

For example:

a) The image capturing system may take an image of a barcode on each product (or of a barcode at a respective location on the shelf), which enables identification of the product by the computerized system. Alternatively, the image capturing system may further comprise a barcode reader.
b) Alternatively, the computerized system can identify the products according to their image taken by the image capturing system. As such, the automatic inventory shelf monitoring

system can identify which product is on each part of all the shelves of the shelf unit and determine the amount/number of items of each product.

c) The system can be configured to identify the type of product, but also to count the number of items on each shelf, with the type of product being pre-inputted into the computerized system by a user. This might be required when the products have no distinctive markings, such as cardboard boxes with minimal writings indicating their contents.

The Shelfie system may be configured to scan the shelf periodically, e.g., every morning or every night. Alternatively, or in addition, the system can be manually activated, thereby enabling the user to scan a shelf upon demand. For instance, when a product is on sale, the shop manager would like to know the status of the remaining amount of the product so that it can be restacked/refilled.

The system is designed to scan the entire length of the shelves within a shelf unit. This is achieved with the use of an adjustable transportation system that is assembled/mounted directly onto the shelf unit. This enables use anywhere regardless of the location and position of the shelf unit in the retail store. The transportation system can be adapted/adjusted to fit any shelf unit in terms of the number of shelves, height and length.

Once the computerized system determines the number of items of each product on the shelf, it calculates the required number of items that need to be added in order to restock each shelf and provides that information to the manager and members of the shelf stacking team.

Shelf stackers interact with the system using an App that allocates tasks to members of the team, monitors transfers from the warehouse and confirms when the re-stocking has been completed. The App is expected to result in time savings and a related reduction in the number of shelf stackers utilized in the store.

The Shelfie system may also include equipment, such as a camera, motion detector or body-heat sensor, designed to identify the presence of shoppers standing in front or near the shelf unit. This provides the ability to:

a) Temporarily suspend the image capturing procedure so it does not interfere with customers' shopping experience.

b) Display messages to shoppers, such as special offers, general advertising, product information and others, delivered importantly to the point of purchase decision.

Expected Benefits

Shelfie believes it provides a series of compelling benefits, which management believes, that following full demonstration of the system to retailers, it will be adopted by large retailers worldwide. The expected benefits include:

a) Enhanced Management - provide the retail branch manager with the option to check at any given moment what is the missing quantity of products on each shelf and what is the priority for handling. The system sends a message to the relevant employee describing the required

task to be completed and receives a recurring message including a photo when the task has been completed.⁹

b) Increased Revenue – minimizing lost sales as a result of inventory being absent from the shelf and therefore unavailable for purchase.¹⁰

c) Decreased Human Resources – improving the efficiency of in-store staff, resulting in the necessity for less staff hirings.¹¹

d) Increased Shopper Loyalty – maintaining shopper satisfaction through a continued restocking of items thereby offering a more attractive shopping experience where products are more readily available. Use of technology positions retailers as advanced.¹²

e) Provides Real Time Location Advertising – opportunity for pinpoint advertising, enticing shoppers with offers and recommending complementary products at the most critical time in the buying process, when the item exists on the shelf.¹³

In-Store Advertising

A Mass Merchant Shopper Engagement Study conducted by POPAI found that 82% of purchasing decisions are made while in a store, 62% of shoppers make an impulse buy while shopping, and 16% of unplanned purchases are driven by in-store ads¹⁴. Therefore, Shelfie believes that the capability of its system to display advertisements to shoppers can result in significant additional revenue to retailers.

Return on Investment for Retailers

The Shelfie units are expected to be supplied on a subscription model basis. Shelfie will supply and install the units in the supermarkets and the owners will pay a monthly fee per unit per store, based on the number of units in each store.

Intellectual Property:

As of the date of this prospectus the Corporation has the following patent-pending applications:

(1) in the United States 18/688,342, 29.2.2024; and

⁹ https://www.simoniot.com/what-are-smart-shelves-in-retail/?

¹⁰ https://www.solumes1.com/en/insights/smart-shelf-what-retailers-need-to-know?utm

¹¹ https://www.itretail.com/blog/supermarket-management-software?utm

¹² https://www.solumes1.com/en/insights/how-can-smart-shelf-technology-change-your-supermarket?utm

¹³ https://en.wikipedia.org/wiki/Electronic_shelf_label?utm_source=chatgpt.com

¹⁴ https://cloudcovermusic.com/blog/in-store-advertising/

(2) in Europe 22773032.2, 25.3.2024.

The patent pending applications relate to:

“an automatic inventory shelf monitoring system for monitoring product inventory in a shelf unit, which includes:

a camera designed to capture an image of the entire product on all shelves within the said shelf unit;
transportation system designed to transfer the image capture system along the shelf unit; and
computerized system that includes processor and memory.”

On-Shelf Availability

According to NielsenIQ 7.4% of supermarket sales were not realized due to out-of-stock/out-of-shelf items, costing retailers US$82 billion in 2021 alone¹⁵.

On-shelf availability (“OSA”) means that a product is on the shelf and available to buy, in the correct place, at the right time. OSA can be hampered by a variety of factors along the supply chain, for example:

Stock is available in the store but is in the wrong place or the backroom.
Stock is on the shelf but is damaged or in an unsaleable condition.
Stock is in transit or at the warehouse.
Stock is unavailable to order from the manufacturer or distribution center.

Internal research by Netguru LLC suggests that for OAS levels of 90% or more, improving the metric by 1% could boost SKU sales by up to 0.8% Also, improving the accuracy of data, such as products available on the shelves versus products in the warehouse, can reduce the time managers and staff need to spend on in-store stock management¹⁶.

However, optimizing OSA is a balance between increasing revenue and the higher costs of service required to achieve a certain level.

¹⁵ https://www.foodmanufacturing.com/supply-chain/news/22043873/data-cgp-retailers-lost-out-on-74-in-sales-to-stockouts-in-2021
¹⁶ https://www.netguru.com/blog/iot-automations-retail-in-warehouse-management

Besides the obvious monetary cost of inventory distortion, inefficient stock levels create a variety of problems for manufacturers, retailers, and consumers:

Waste – freshness of products plays a significant role in customer experience¹⁷ for grocery retailers and is an important factor for customers when choosing where to shop. This consideration means that retailers must strike a fine balance between optimizing OSA, maximizing freshness, and minimizing shrinkage. At the same time, holding too much stock of any product ties up working capital and space in storerooms, warehouses, and distribution centers.
Lost Customers – if shoppers cannot find what they are looking for, it is estimated that 70% will buy a different brand, and 30% will visit a different store¹⁸. Neither of these options is good for retailers and manufacturers who often spend significant sums of money in marketing and brand awareness to acquire those customers. Depending on the strength of the customers’ loyalty to the store or the product, the retailer and the manufacturer could permanently lose future sales.
Inventory tracking tools – given that traditional stock control processes monitor stock at the store level rather than at the shelf level, video analysis, Smart Shelves, RFID, and object recognition tools can be game-changing¹⁹.
Machine learning-powered insights – Machine learning solutions can give the retailer a substantial operational advantage. Using machine learning algorithms on current data can increase the precision of identified goods, generate trend predictions, and detect anomalies.

MARKET OPPORTUNITY & COMPETITION

Total Addressable Market

In the U.S., there are over 60,000 supermarkets²⁰ and over 120,000 in Europe²¹. The average store in the U.S. carries almost 44,000 SKUs in roughly 46,500 square feet of space²².

¹⁷ https://www.netguru.com/blog/solving-food-waste-in-retail
¹⁸ https://www.forbes.com/sites/joanverdon/2021/03/28/toilet-paper-paper-towel-shortages-cost-stores-over-1-billion-with-new-out-of-stocks-likely/?sh=12177cf86516
¹⁹ https://www.netguru.com/blog/iot-improving-retail-inventory-management
²⁰ https://www.ibisworld.com/industry-statistics/number-of-businesses/supermarkets-grocery-stores-united-states/#:~:text=Questions%20Clients%20Ask%20About%20This%20Industry&text=There%20are%2063%2C385%20Supermarkets%20%26%20Grocery,of%20%2D0.6%25%20from%202022.
²¹ https://rentechdigital.com/smartscraper/business-report-details/europe/supermarkets
²² http://paulellickson.com/SMEvolution.pdf

If the average subscription will be US$150,000 per store per year, the total addressable market on a global basis is estimated by Shelfie at US$27 Billion per year.²³²⁴²⁵

Competitive Landscape

Several companies have focused on developing and marketing solutions to supermarkets and other retail chains, aiming to provide real time monitoring of on-shelf stock, for example:

Company Name	Product Summary	Shelfie Differences
Trax Retail²⁶	Retail Watch is Trax’s flagship product, designed to provide retailers with an end-to-end solution for real-time shelf monitoring and analytics. Using in-store cameras and image recognition, Retail Watch automatically scans store shelves, analyzes stock	Shelfie offers several advantages over Trax, primarily in flexibility and additional revenue opportunities. Unlike Trax, which relies on fixed camera networks, Shelfie utilizes adaptable shelf-mounted cameras tailored to specific store layouts. This approach

²³ This statement contains forward-looking information and therefore actual results may vary from such forward-looking information either by virtue of the estimated annual subscription per store being materially less than the estimated US$150,000 and/or the total addressable market be materially lower than the estimated US$27 billion. It is included to provide disclosure as to the potential market opportunity that may exist for the Shelfie product as one of the competitors in the market (See "Competitive Landscape") but should NOT be used to estimate potential revenue of Shelfie as Shelfie is an early stage company and there can be no guarantee that it will reach commercialization of its products or actually obtain revenue.

²⁴ The total addressable market number was calculated as follows: based on data received from the consultants at A2Z Cust2Mate Solutions Corp., which has several retail chains as customers, the average supermarket size is approximately 20,000 square feet, and contains 15 aisles on average in each supermarket. All calculations were based on these numbers. Assuming 15 pieces of Shelfie Product (one per aisle) in each supermarket and assuming the Company's Product is priced at approximately $10,000 per unit per year, this amounts to around $150,000 per year charged to a supermarket. Therefore, multiplying $150,000 (on average) by 180,000 supermarkets in Europe and the U.S. results in a total of $27 billion per year.

²⁵ The Issuer has relied on A2Z Cust2mate Solutions Corp., a company of whom the Issuer’s director Bentsur Joseph, is the Chairman to provide Shelfie with data relating to market purchasing demand and market size. Upon analyzing the data provided by A2Z Cust2mate Solutions Corp., and physically attending at several market chains in Israel to count aisles and measure floor and aisle spaces, management of Shelfie reached the conclusion that these parameters are a fair and reasonable estimate of the global addressable market.

(A2Z Cust2mate Solutions Corp., developed a smart cart technology, and has smart carts deployed with several retailers worldwide including in Israel, Europe and Central America. A2Z Cust2Mate Solutions Corp. has deep expertise in the retail industry and data on retail stores and operations deriving from their operations and relationships with retailers, over several worldwide geographical locations.

²⁶ https://traxretail.com/

	conditions, and generates actionable insights.	allows targeted monitoring of high-priority sections, and enabling retailers to customize area coverage. Additionally, Shelfie provides a unique in-store advertising capability directly on their shelving scanning unit,—an offering absent in Trax's portfolio.
Simbe Robotics^{27}	SIMBE Robotics offers Tally, an autonomous shelf-scanning robot designed to enhance inventory management, operational efficiency, and customer experience. Tally autonomously navigates store aisles, continuously auditing shelves to identify out-of-stock products, misplaced items, and pricing errors.	Shelfie offers faster operational efficiency, and a unique revenue stream through in-store advertising both of which are not available on the Tally. Unlike Tally, which requires multiple units for large stores and extended periods to complete scans, Shelfie’s adaptable shelf-mounted camera system can cover 75% of a 2,000 square meter store in just 30 minutes compared to Simbe Robotics. This real-time monitoring provides near-instant insights, reducing operational delays.
Shelfie Retail^{28}	Primary product is an AI-driven shelf monitoring system designed for real-time retail inventory tracking. It utilizes machine learning and image processing algorithms to capture high-resolution images of store shelves through fixed overhead cameras. The system continuously scans and processes these images, detecting stock gaps, misplaced items, and pricing discrepancies with high	Unlike Shelfie Retail, which uses fixed cameras for image capture, Shelfie employs an adaptable system of shelf-mounted cameras and real-time image processing. This flexibility allows retailers to prioritize high-impact sections, optimizing costs and installation efforts. Additionally, Shelfie’s in-store advertising capabilities enable targeted promotions directly on the shelf, a feature not offered

27 https://www.simberobotics.com/
28 https://shelfieretail.com

	accuracy. A complete store can be scanned in real time, providing instant insights without requiring manual intervention, making it an efficient solution for large-scale retailers.	by Shelfie Retail. Shelfie also provides scans, capable of covering 75% of a supermarket within 30 minutes, compared to Shelfie Retail's fixed-camera approach.
ParallelDots^{29}	ShelfWatch, is an AI-powered retail execution platform that leverages advanced computer vision technology to analyze images of retail shelf displays. By processing these images, ShelfWatch provides real-time insights into key performance indicators (KPIs) such as product placement, pricing compliance, promotional execution, and share of shelf. It enables consumer packaged goods (CPG) manufacturers and retailers to monitor in-store compliance, identify execution gaps, and make data-driven decisions to enhance product visibility and maximize sales.	ParallelDots focuses on its ShelfWatch image recognition tool, which relies on captured images to provide stock-level insights, Shelfie goes further with its adaptable shelf-mounted camera system and real-time monitoring capabilities. This allows Shelfie to provide faster, more actionable data and customize coverage based on specific store layouts, reducing unnecessary monitoring costs. Additionally, Shelfie offers in-store advertising directly on shelf displays, enabling targeted promotions a feature not available with ParallelDots.
Pensa Systems^{30}	Pensa Systems' flagship product is an AI-powered retail shelf intelligence solution that delivers real-time, highly accurate visibility into shelf conditions for CPG brands and retailers. Using autonomous drones, Pensa's system captures and analyzes video streams of store shelves to detect stockouts, optimize	Pensa Systems relies on drones for near real-time shelf scanning, an approach that can be limited by operational challenges such as navigation in crowded store environments and restricted scanning capabilities in certain store layouts. In contrast, Shelfie's adaptable shelf-mounted camera system provides

29 https://www.paralleldots.com/
30 https://www.pensasystems.com/pr-pensa-granted-patent-for-ai-that-can-identify-on-shelf-retail-products-at-scale/

	product placement, and ensure planogram compliance. The system can scan an entire store in approximately 30 minutes, leveraging advanced computer vision and AI analytics to provide actionable insights faster than traditional manual audits. This rapid scanning capability allows retailers to address inventory issues in near real-time, reducing lost sales and improving operational efficiency	consistent, real-time monitoring tailored to any store configuration, ensuring higher reliability and coverage. Additionally, Shelfie’s ability to complete rapid scans of 75% of a store within 30 minutes, compared to Pensa Sytems, provides operational efficiency far superior to the slower drone-based scanning of Pensa Systems.

The management of Shelfie believes that Shelfie is the fastest shelf monitoring solution, outperforming Shelfie Retail, ParallelDots, and Pensa Systems with its real-time AI-powered scanning and ultra-fast image processing.

Unlike Shelfie Retail, which relies on fixed cameras for continuous monitoring but requires processing time for full-store analysis, Shelfie delivers instantaneous insights across multiple store locations simultaneously. In contrast to ParallelDots, which depends on store employees manually scanning shelves with a smartphone—taking approximately 5 seconds per shelf scan—Shelfie fully automates the process, eliminating delays caused by human intervention.

While Pensa Systems uses autonomous drones to scan an entire store in approximately 30 minutes, Shelfie operates in real-time, ensuring immediate detection of stockouts, misplaced products, and pricing discrepancies without having to wait for a full-store scan cycle. By leveraging next-generation AI and edge computing, Shelfie continuously analyzes shelf conditions at unparalleled speed, making it the most efficient and scalable shelf monitoring solution available today.

As of the date of this prospectus Shelfie has not received any correspondence from any Person that it has infringed on such Person's intellectual property and has no knowledge of any actual or pending legal challenge any Person.

The Corporation believes that its patent pending applications provides it with the necessary protection for its product and dose not anticipate any challenges from competitors.

BUSINESS OBJECTIVES, STRATEGY AND MILESTONES

The current status of Shelfie's business development is as follows:

a) Extensive Market Research - has been carried out, highlighting the needs in the retail market today and the opportunity to provide the required solution for the benefit of both

retailers and consumers. This has included attendance at exhibitions and industry events including the National Retail Foundation (NRF) exhibitions in New York, USA, Grocery Store exhibition in Las Vegas, USA and EuroCIS in Dusseldorf, Germany and gaining an understanding of potential competitors and their capabilities.

b) Technology & Product – a prototype system has been designed and assembled but has not yet been developed for commercial production.

c) Trials – Shelfie management team members have a strong network including many major supermarkets. This will be utilized to arrange pilot projects.

d) Intellectual Property – three patent applications for the complete system have been filed in the United States, one patent application has been filed in Europe and one international patent has been. As of the date of this prospectus the Corporation only has the following patent-pending applications: in the United States 18/688,342, 29.2.2024; and in Europe 22773032.2, 25.3.2024.

e) Investment in R&D – an aggregate amount of approximately US$1,900,000 has been invested to date.

Business & Revenue Model

Shelfie will use subcontractors to manufacture the units and expects to sell subscriptions directly to retail chains. The units are expected to be supplied on a subscription basis under which:

a) Shelfie will retain ownership of the units.

b) Customers will pay an agreed amount per month for use of the system under a multi year contract.

c) Local subcontractors will be hired to install the units and provide the necessary training to supermarket staff.

d) Shelfie (including through its representatives/subcontractors) will be responsible for maintaining and servicing the units.

e) Shelfie also expects to generate revenue from advertising placed on its products/units. The Product currently has a screen that was designed to display advertising. Today the retailers rent their real estate for advertising by brands. Shelfie expects that the retailers would like to use the Shelfie product as an additional location for advertising. If a retailer desires to use the advertising screen on the Product it would be required to pay a price to Shelfie based on a monthly subscription. As of the date of this prospectus Shelfie has not included the possible revenue that may be generated by such advertising into its business model.

Marketing

Shelfie intends to gain market entry in two stages:

a) Israel – Shelfie entered into an agreement with Buchwalter Presentation and Storage Ltd. (“Buchwalter”) under which Buchwalter, a supplier of products (including shelving) and technologies to supermarkets in Israel will serve as exclusive representative of Shelfie in Israel (the “Buchwalter Agreement”). Buchwalter is a designer and builder of shelving solutions for Israeli supermarket retailers. Buchwalter have designed, engineered and built the interior space of Israeli supermarket retailers.

b) Overseas – Once a foothold is gained in the local market in Israel. Shelfie intends to focus on the U.S. and Europe markets, which are the largest target markets in the world. Building on its expected success of the “pilot projects” in Israel, Shelfie intends to reach agreements with numerous supermarkets and other leading retailers and with suitable partners and representatives in these regions.

Operating Structure

Shelfie currently has five consultants, including Ben Tsur Joseph (who provides CEO and Chairperson services) and Alan Rootenberg (who provides CFO services) and there other consultants consisting of a software engineer responsible for all software and AI Analysis matters (the “Software Engineer”), a product technician responsible for hardware functionality (the “Product Technician”) and an individual responsible for overseeing the implementation of the Company’s business plan to commercialization (the “Product Manager”). To support its operations as the business grows, Shelfie will as the business develops, hire further consultants to include one or more of the following functional teams:

a) Technology Maintenance – Shelfie expects to maintain a technology team with the responsibility for maintaining and upgrading the system, including specific requests by potential and existing customers.

b) Marketing Team – working to raise awareness of the Shelfie system and generally promote sales of the unit.

c) Back Office – administration and financial control.

To the extent determined by management of Shelfie to be beneficial for the purpose of maintaining individuals on a long term basis, Shelfie may convert one or more consultant arrangements to that of employer/employee relations which changes, if they occur, are not expected to cause any material change in the ongoing cashflow of Shelfie.

Market Penetration

Shelfie expects that the data from the Israeli Pilot, performed under “real” market conditions in an existing supermarket chain will enhance Shelfie’s ability to address the requirements of other supermarket chains given that the general existing and stocking methods in supermarkets

internationally are generally the same. This data includes: aggregation of data relating to the efficiency of shelf stockers and supermarket managers used to increase the efficacy and response time of the Shelfie product; identifying system “bugs” and challenges; and aggregating technical data that may affect the timely performance of the integrated system; and information on how to integrate the product with existing supermarket management systems. Shelfie’s consultant A2Z Cust2Mate Solutions Corp., through its joint director Bentsur Joseph, being a company integrated internationally in the supermarket industry have determined that the functionality of supermarkets in the U.S.A. and Europe are similar to that which exists in Israel and therefore no material changes will be required to be made to the Product in order to make it viable in different geographical locations. Shelfie believes that through management connections in the retail chain industry and on the basis of the aforementioned data it expects to receive and analyse from the Israeli Pilot that it will be able to duplicate the needs of other supermarket chains in the U.S. and/or in Europe, which if successful, will result in a foothold for further expansion in the U.S. and Europe.

It is expected that supermarket chains will phase in deployment of Shelfie in terms of both the number of retail sites and the number of shelves covered at each site:

Small branch	–	up to 5 Shelfie units
Medium branch	–	up to 15 Shelfie units
Large branch	–	up to 40 Shelfie units^{3132}

Research and Development

Currently, the prototype system has been designed and assembled but has not yet reached the stage of commercial production.

31 This statement contains forward-looking information and therefore actual results may vary from such forward-looking information either by virtue of the estimated number of retail sites and/or number of shelves covered at each site being materially less than the estimated number disclosed. The numbers disclosed are included to provide disclosure as to the potential market opportunity that may exist for the Shelfie product but should NOT be used to estimate potential revenue of Shelfie as Shelfie is an early stage company and there can be no guarantee that it will reach commercialization of its products or actually obtain revenue.

32 The Issuer has relied on A2Z Cust2mate Solutions Corp., a company of whom the Issuer’s director Bentsur Joseph, is the Chairman to provide Shelfie with data relating to market purchasing demand and market size. Upon analyzing the data provided by A2Z Cust2mate Solutions Corp., and discussing the potential demand for its product with several market chains in Israel, management of Shelfie reached the conclusion that these parameters are a fair and reasonable estimate of Shelfie’s potential market penetration:

The following, based on consultation with Shelfie’s consultants A2Z Cust2mate Solutions Corp³³, describes the required phases (and an estimate of costs and timing) in the Corporations’ business cycle which if completed will, the Corporation believes, result in commercial production:

Phase 1: This phase is expected to take 6 months. During this phase, the Company will be conducting a pilot at one Israeli supermarket location with the goal of demonstrating the efficacy of the Shelfie system spanning an area of 3 meters across five shelves per system. (the “Israeli Pilot”). The Product Manager will physically attend the Israeli Pilot location at various intervals during the Israeli Pilot and manage the customer product interphase, liaising between the customer and both the Software Engineer and Product Technician to address any problems. Building upon these findings, the Company will endeavour to fine-tune instrumentation, refine disassembly and assembly processes, and ensure seamless synchronization between mechanical and electronic components. As detailed in “Use of Available Funds” below, US$30,000³⁴ per month will be allocated to Phase 1 of research and development.

Phase 2: Assuming the successful completion of Phase 1 based on the data gathered during Phase 1, the Company would immediately move to Phase 3 and by pass this Phase 2. In the vent that Phase 1 results in certain system failures that could not be fixed during Phase 1, the Company has allocated an additional 3 months to adequately address any issues. While the Company does not expect any such issues it has allocated additional resources for the Software Engineer, Product Technician and Product Manager to analyze and optimise the Product. As detailed in “Use of Available Funds” below, US$30,000³⁵ per month will be allocated to Phase 2 of research and development.

Phase 3: Following the successful conclusion of Phase 1 or 2, as the case may be, , the commercial-ready prototypes will be in a position to undergo production based on customer needs. At this stage the Company will endeavour to initially sell its products with Buchwalter pursuant to the Buchwalter Agreement and utilizing Ben Tsur Joseph’s connections in the retail industry, as past Chief Executive Officer and current Chairman of A2Z Cust2Mate Solutions Corp., to actively seek additional retail points of market entry. Upon the execution by the service provider of the initial transaction with a relevant customer, the Company will swiftly deploy an embedded team (consisting of the same team

³³ A2Z Cust2mate Solutions Corp., developed a smart cart technology, and has smart carts deployed with several retailers worldwide including in Israel, Europe and Central America. A2Z Cust2Mate Solutions Corp. has deep expertise in the retail industry and data on retail stores and operations deriving from their operations and relationships with retailers, over several worldwide geographical locations. A2Z Cust2Mate Solutions Corp. knowledge is helpful with respect to timing estimates as it has already several successful pilots and deployments in the same industry as Shelfie’s and has the knowledge of the process being operated at the retail industry generally and at the supermarket chains specifically. As part of its consulting to Shelfie , A2Z Cust2Mate Solutions Corp. suggested that the phases described herein would be a best estimate based on the pilots and deployments conducted by A2Z.

³⁴ This amount is based on the service provider costs required to complete the research and development intensive phase. The individuals contracted hold the following positions: Software Engineer (US$6,000 per month), 2 Product Technician (2 for an aggregate of US$15,000 per month) and Product Manager (US$9,000 per month).

³⁵ This amount is based on the service provider costs required to complete the research and development intensive phase. The individuals contracted hold the following positions: Software Engineer (US$6,000 per month), 2 Product Technician (2 for US$15,000 per month) and Product Manager (US$9,000 per month).

used in Phase 1) to the customer's offices to complete an initial pilot integration program of no more than two weeks which if successful, based on preapproved program parameters, will result in a predetermined amount of subscriptions for the Shelfie product by the retail customer. This dedicated team will deliver embedded services until the prototype system is seamlessly integrated into the customer's infrastructure. The Company believes that this Phase will be completed within 3 months of commencement. Upon the successful completion of Phase 3, revenue generation is expected to commence. As detailed in "Use of Available Funds" below, US$18,000³⁶ per month will be allocated to Phase 3 of research and development.

USE OF AVAILABLE FUNDS

Available Funds and Principal Purposes

The Corporation is not raising any funds in conjunction with this Prospectus and, accordingly, there are no proceeds to be raised by the Corporation pursuant to this Prospectus.

As at the date of this Prospectus, the Corporation has cash and cash equivalents of approximately US$1,522,000 and approximately US$1,172,000 in working capital(1) (US$1,180,000 as of March 31, 2025) and intends to allocate the foregoing funds as follows; however, it reserves discretion to allocate to other strategic, operational or other demands as and when they arise:

Use of Available Funds	Amount (US$)
Costs related to public listing	$100,000
Research & Development (2)	$324,000
Selling & Marketing (“S&M”) costs	$55,000
General and administrative (“G&A”) costs	$121,000
Total Use of Funds	$600,000
Unallocated working capital(3)	$580,000
Total:	$1,180,000

Note:

(1) Working Capital is calculated as current assets less current liabilities and excludes the prepaid expenses balance in the September 30, 2024 condensed interim financial statements, as this prepaid expense was charged to the Corporation’s statement of comprehensive loss during the fourth quarter of 2024 as the service was provided during this period.

(2) For a description of these expenditures please See "Research and Development" immediately above.

(3) The cash portion of the unallocated working balance has been held in short-term, investment grade, interest-bearing securities, in government securities or in bank accounts at the discretion of management. The CFO of the Company

36 This amount is based on the service provider costs required to complete the research and development required for the sales intensive phase. The individuals contracted hold the following positions: Software Engineer (US$3,600 per month), 2 Product Technician (2 for US$9,000 per month) and Product Manager (US$5,400 per month).

will be responsible for the supervision of the accounts or investment of unallocated funds. Any amounts invested will be in short term deposits with A-grade banks. None of the unallocated working capital will be used for investor relations or promotional activities.

It is anticipated that the available funds, not including the cash portion of the unallocated working capital in the amount of $572,000 will be sufficient to achieve the Corporation’s objectives over the next 12 months.

Following the deployment of the use of available funds the Corporation anticipates to have a product deployed on at least one retail chain in a position to commence sales.

The Corporation has negative cash flow from operating activities and has historically incurred net losses. Although the Corporation anticipates it will have positive cash flow from operating activities in future periods, the Corporation cannot guarantee it will have cash flow positive status from operating activities in future periods. To the extent that the Corporation has negative operating cash flows in future periods, it may need to deploy a portion of its existing working capital to fund such negative cash flows. The Corporation will be required to raise additional funds through the issuance of additional equity securities, through loan financing, or other means, such as through partnerships with other companies and research and development reimbursements. There is no assurance that additional capital or other types of financing will be available if needed or that these financings will be on terms at least as favourable to the Corporation as those previously obtained. See “Risk Factors”.

Business Objectives and Milestones

As of the date hereof, the Corporation anticipates the following milestones and business objectives, related approximate costs and the estimated time period in which each milestone is expected to occur.

The following are “forward-looking statements” and as such, there is no guarantee that such milestones will be achieved on the timelines indicated or at all. Forward-looking statements are based on management’s current expectations and are subject to a number of risks, uncertainties, and assumptions. See “Forward-Looking Statements” and “Risk Factors”.

Objective	Milestone	Status	Spend to Date (US$)	Estimated Aggregate Remaining Spend for the Period (US$)	Anticipated or Confirmed Quarter of Complete
Development of Shelfie Product Prototype	Present a 1st generation product at industry convention	Complete	$1,900,000	$0	Completed
Develop Prototype to stage of Commercial Production	Complete Phase 1 of research & development program	Incomplete	$0	R&D: $180,000
G&A: $60,000(1)	End of Q3 2025

Objective	Milestone	Status	Spend to Date (US$)	Estimated Aggregate Remaining Spend for the Period (US$)
Production of Commercial ready prototypes	Complete Phase 2 of research & development program	Incomplete	$ 0	R&D: $90,000
G&A: $30,000(1)	End of Q4 2025
To be completed once Phase 3 details above are completed by Shelfie.	Complete Phase 3 of research & development program	Incomplete	$0	R&D: $54,000
S&M: $55,000
G&A: $31,000(1)	End of Q1, 2026

(1) General and Administration expenses for 12 months, are budgeted at $121,000 and will be incurred over the 3 phases. General and Administration expenses include CFO compensation ($36,000), rental and administration costs ($55,000) and D&O insurance costs ($30,000).

DIVIDEND POLICY

We have not declared dividends on any of our shares in the past and we do not intend to pay any in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend on the financial condition, business environment, operating results, capital requirements, any contractual restrictions on the payment of dividends and any other factors that the Board of Directors deems relevant.

NOTEWORTHY FEATURES OF ISRAELI CORPORATE LAW

There are differences between the Israeli and Canadian statutory regimes in the area of corporate law. (See “Shareholder Rights, Directors’ Obligations a Comparative Law Summary”). The rights and obligations of shareholders of an Israeli incorporated company are set forth in the company’s articles of association, and are in addition to certain rights and obligations shareholders may have in accordance with applicable Israeli law and regulations. Conditional upon listing of the Company’s Common Shares in accordance with this prospectus, Shelfie expects to adopt new articles of association that will, to the extent not inconsistent with Israeli Companies Law, provide certain protections to shareholders offered by a company that is incorporated under the OBCA. The following is a summary of a number of noteworthy features of the Israeli Companies Law. The following summary is not, however, an exhaustive review of Israeli corporate law. In addition to the foregoing, Shelfie will become a “reporting issuer” pursuant to applicable securities legislation in the Province of Ontario and will also be subject to applicable Canadian securities laws and the rules of the CSE or any stock exchange on which the Common Shares may be listed on.

Corporate Governance Practices

Under the Israeli Companies Law, companies incorporated under the laws of the State of Israel whose shares are publicly traded on a stock exchange, including a foreign stock exchange, are considered public companies under Israeli law and are required to comply with various corporate governance

requirements under Israeli law relating to such matters, including the requirement to designate External Directors, composition of the audit committee, composition of the compensation committee and the requirement to have an internal auditor. These requirements are in addition to the corporate governance requirements imposed by the applicable Canadian securities laws to which Shelfie will become subject upon the listing of the Common Shares under this prospectus.

Board of Directors; Powers of the Board

Under the Israeli Companies Law and Shelfie’s amended and restated articles of association (the “Articles of Association” or the “Restated Articles”) to be effective upon the listing of the Common Shares under this prospectus, Shelfie’s business and affairs are managed under the direction of our Board of Directors. The Corporation’s Board of Directors may exercise all powers and may take all actions that are not specifically granted to shareholders or to management. The Corporation’s chief executive officer is responsible for Shelfie’s day-to-day management. The Israeli Companies Law provides that a person may not be elected and may not serve as a director in a public company if he or she does not have the required qualifications and the ability to dedicate an appropriate amount of time for the performance of his or her director position in a company, taking into consideration, among other factors, the special needs and size of such company.

Under the Articles of Association, the Board of Directors must consist of at least four and not more than ten directors, including at least two External Directors required to be appointed under the Israeli Companies Law. Other than the External Directors, for whom special election requirements apply under the Israeli Companies Law, the vote required to appoint a director is a simple majority vote of holders of our voting shares, participating and voting (excluding abstentions) at the relevant meeting. Each director (except for External Directors as provided below) will hold office until the next annual general meeting of the Corporation’s shareholders at which time he or she may be re-elected or replaced, unless the tenure of such director expires earlier pursuant to the Israeli Companies Law or unless he or she is removed from office as described hereinafter.

Under the Articles of Association, the approval of the holders of a majority of the voting rights participating and voting at a general meeting (excluding abstentions) is generally required to remove any of our directors from office. In addition, vacancies on the Board of Directors, other than vacancies created by an External Director, may be filled by a vote of a simple majority of the directors then in office. A director so appointed will hold office until the next annual general meeting of our shareholders.

External directors are elected for an initial term of three years and may be elected for additional three-year terms under the circumstances described below. External directors may be removed from office only under limited circumstances set forth in the Israeli Companies Law.

According to the Israeli Companies Law, the board of directors may exercise all powers and may take all actions that are not specifically granted to shareholders or to an office holder of the company. The board of directors determines the company’s policy and supervises the performance of the chief executive officer duties and actions and is authorized, among others, to: (i) determine the company’s business plans, principles for funding them and the priorities between them; (ii) review the financial status and determine the credit the company is authorized to obtain; (iii) determine the company’s organizational structure and remuneration policy; (iv) resolve to issue series of debentures; (v) be

responsible for the preparation of financial statements and approve the financial statements; (vi) report to the company's annual general meeting of shareholders on the status of the company's affairs and the results of its business operations; (vii) appoint and remove the chief executive officer; (viii) resolve whether to approve (or disapprove) certain transactions, which require the approval of the board of directors under the Israeli Companies Law or its articles of association; (ix) issue securities and securities convertible into shares up to the limit of the company's authorized share capital; (x) resolve to effect a distribution in accordance with the Israeli Companies Law; (xi) provide the company's opinion in respect of a special tender offer as stipulated in the Israeli Companies Law; and (xii) determine the minimum number of directors, who should have accounting and financial expertise. The board of directors may, subject to the provisions and limitations of the Israeli Companies Law and any other applicable law, delegate its powers to committees composed of members of the board of directors.

In determining the number of directors required to have accounting and financial expertise, the members of the Board of Directors must consider, among other things, the type and size of the company, the scope and complexity of its operations and the number of its board members. The Board of Directors has determined that at least two of our directors must possess accounting and financial expertise as defined under Israeli law. In this regard, our Board of Directors has determined that Haim Alkoby and Yehudit Halpern, each possesses "accounting and financial" expertise as such term is defined under the Israeli Companies Law. According to regulations promulgated under the Israeli Companies Law, a director with accounting and financial expertise is a person who, by reason of his or her education, professional experience and skills, has a high level of proficiency in and understanding of business-accounting matters and financial statements, which enables him or her to have an in depth understanding of the Company's financial statements and to initiate discussion regarding the manner in which financial information is presented.

A nominee for service as a director in a public company may not be elected without submitting a declaration to the company, prior to his or her election, specifying that he or she has the requisite qualifications to serve as a director, an External Director (if applicable) or an independent director, as applicable, and the ability to devote the appropriate time to performing his or her duties as such.

Chairperson of the Board

The Articles of Association provide that the chairperson of the Board of Directors is appointed by the members of the Board of Directors and serves as chairperson of the board throughout its term as a director, unless resolved otherwise by the Board of Directors. Under the Israeli Companies Law, the chief executive officer or a relative of the chief executive officer may not serve as the chairperson of the board of directors, and the chairperson or a relative of the chairperson may not be vested with authorities of the chief executive officer without obtaining certain shareholder approval pursuant to the Israeli Companies Law.

In accordance with the Israeli Companies Regulations, Mr. Ben Tsur Joseph will serve as CEO and Chairperson of the Board for an initial term of 5 years as of the listing of the Corporation's Common Shares, after which he may continue to serve as CEO and Chairperson of the Board subject to the approval of the shareholders' meeting in accordance with the Israeli Companies Law.

External Directors

The shareholders of public companies must elect at least two External Directors. At least one of the External Directors must have “accounting and financial expertise” and the rest of the External Directors must have either “professional competence” or “accounting and financial expertise”. The conditions and criteria for a director qualifying as having accounting and financial expertise or professional competence are set out in regulations adopted under the Israeli Companies Law.

External Directors must meet certain standards of independence at the time of their appointment and during the two-year period prior to their appointment. The Israeli Companies Law provides that a person is not qualified to be appointed as an External Director if: (i) the person is a relative of the Controlling Shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an External Director: (a) any affiliation with the company, with the controlling shareholder of the company or a relative of such person, or with any entity controlled by or under common control with the company or with the controlling shareholder of the company; or (b) in the case of a company with no controlling shareholder and no shareholder holding a controlling block (i.e., 25% or more of the voting rights in a general meeting of shareholders), had at the date of appointment as an External Director, any affiliation with a person then serving as chairperson of the Board of Directors or chief executive officer, a holder of 5% or more of the issued share capital or voting power in the company or the most senior financial officer. For this purpose, the Israeli Companies Law defines the term “affiliation” as employment relationships, business or professional relationships maintained on a regular basis, control relationships and service as an office holder (excluding service as a director appointed to serve as an External Director in a company which is about to offer its shares to the public for the first time). A person may not be appointed as an External Director if his or her other activities or position create, or are likely to create, a conflict of interest with his or her service as a director or interfere with his or her ability to serve as a director. A director of one company may not be appointed as an External Director of another company if a director of the other company is acting as an External Director of the first company at such time. Under the Israeli Companies Law, an External Director must be appointed at a general meeting of shareholders of the company within three months following the admission of the company’s shares for trading on a stock exchange. The Corporation intends to hold a general meeting of shareholders within three months of the completion of the listing of the Common Shares on the CSE to seek approval for the appointment of two External Directors. Presently, the Corporation has determined that Ms. Lilach Lotan, Ms. Yehudit Halpern, Mr. Zaler Mordchai Salom Iosfand Mr. Haim Alkoby are Independent Directors, and intends to appoint Mr. Haim Alkoby and Ms. Yehudit Halpern as External Directors, subject to obtaining the required shareholder approvals in accordance with the Israeli Companies Law. The Board of Directors has determined that, Mr. Haim Alkoby and Ms. Yehudit Halpern have “accounting and financial expertise”.

Without derogating from the aforementioned, a person will not serve as an External Director if such person, his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has business or professional relationships with any person or entity with which an affiliation is forbidden in accordance with the abovementioned provisions regarding qualification to be appointed as an External Director, even if such relationship is not maintained on a regular basis, other than negligible relationships, as well as a person who received remuneration not in accordance with the provisions of the Israeli Companies Law.

The resolution to appoint External Directors must be adopted by a simple majority of the votes cast at the general meeting, provided that either: (i) such majority includes at least a majority of the shares held by all shareholders who are not Controlling Shareholders and who do not have a personal interest in such election (other than a personal interest which is not derived from a relationship with a controlling shareholder), present and voting at such meeting (and without including any abstaining votes), to which we refer as a disinterested majority; or (ii) the total number of shares of non-Controlling Shareholders and shareholders who do not have a personal interest in such election (other than a personal interest which is not derived from a relationship with a Controlling Shareholder) voting against the election of an External Director does not exceed 2% of the aggregate voting rights in the company. An External Director must be eligible to be appointed as a director. A company whose shares have been offered outside of Israel or whose shares are listed on a foreign stock exchange is entitled to appoint an External Director who is a non-Israeli resident. If, at the time of appointment of an External Director, all of the members of the board of directors who are not controlling shareholders or their relatives are of one gender, the External Director appointed must be of the other gender.

Each External Director is appointed for a term of three years, which may be extended for two additional terms of three years each, provided that either: (i) his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such re-election exceeds 2% of the aggregate voting rights in the company; or (ii) his or her service for each such additional term is recommended by the board of directors and is approved at a shareholders meeting by the same majority required for the initial election of an External Director (as described above), provided however, that if the re-election is sought pursuant to the option noted in paragraph (i) above, the External Director appointed under this paragraph for an additional period is not, at the time of the appointment, an affiliated or competing shareholder or a relative of such a shareholder, and has no affiliation with such affiliated or competing shareholder at the time of the appointment or during the two year period preceding the appointment. An “affiliated or competing shareholder” is defined under the Israeli Companies Law as the shareholder who proposed the appointment or a holder of 5% or more of the issued share capital or voting rights in the company, all if at the appointment date such shareholder, the controlling shareholder of such shareholder or an entity under control of any of them has a business relationship with the company or if such shareholder, the controlling shareholder of such shareholder or an entity under control of any of them is a competitor of the company.

Despite the aforesaid, in accordance with the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, in foreign-traded Israeli company, external directors' and tenure is not limited to 9 years, provided that any extensions of tenure beyond 9 years shall be subject to approval by the company's audit committee, by the board of directors and by a special majority in the general meeting (the same mechanism applicable to the original appointment of

such directors) and that the audit committee and the board of directors approved that such extension is required given the expertise and special contribution of such external director/s.

External directors may be removed from office only by the same percentage of shareholders as required for his or her election, or by a court ruling, and then only if the External Director ceases to meet the statutory qualifications for his or her appointment or if he or she violates his or her fiduciary duties towards the company.

In the event of a vacancy of an External Director’s office, the board of directors is required to convene a shareholders’ meeting to appoint a new External Director, if there are not two other External Directors serving at that time on the board of directors. An External Director is entitled to compensation solely as provided by regulations adopted under the Israeli Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection with his or her service as an External Director with the company (other than indemnification, exculpation and insurance coverage as permitted under the Israeli Companies Law). Each committee of a company’s board of directors which is authorized to exercise the board of directors’ authorities is required to include at least one External Director, except for the audit committee and compensation committee, which are each required to include all External Directors.

Following the termination of an External Director’s membership on a board of directors, such former External Director and his or her spouse and children may not be provided a direct or indirect benefit by the company, its controlling shareholder or any entity under its controlling shareholder’s control, including serving as an office holder of the company or a company controlled by its controlling shareholder and cannot be employed by or provide professional services to the company for pay, either directly or indirectly, including through a corporation controlled by that former External Director, for a period of two years following said termination of his service as an External Director, and for other relatives of such former External Director, who are not his or her spouse or children, for a period of one year following said termination of service.

Duties of Shareholders

Under the Israeli Companies Law, each shareholder of a company has a duty to act in good faith and in a customary manner in exercising his or her rights and fulfilling his or her obligations to the company and other shareholders and to refrain from abusing his or her power in the company, among others, with respect to shareholder votes on the following matters: (i) any amendment of the articles of association; (ii) an increase in the company’s authorized share capital; (iii) a merger; or (iv) the approval of certain interested party actions and transactions that require shareholder approval. Every shareholder has the general duty to refrain from depriving other shareholders of their rights. In addition, certain shareholders have a duty of fairness towards the company. These shareholders include any controlling shareholder, any shareholder who knows that he or it possesses the power to determine the outcome of a shareholder vote in a general meeting or in a class meeting and any shareholder who, according to the articles of association, has the power to appoint, or to prevent the appointment of, an office holder or other power towards the company. The Israeli Companies Law does not define the substance of this duty of fairness, except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness.

Shareholders' Meetings

In accordance with the Israeli Companies Law, the Corporation is required to hold an annual general meeting of the shareholders once every calendar year that must be held no later than 15 months after the date of the previous annual general meeting. The Board of Directors is entitled to convene a special general meeting of shareholders, within or outside of Israel, pursuant to a resolution of the Board or pursuant to a request by: (i) any two members of the Board or 25% of the directors then in office; or (ii) any shareholder or shareholders holding at least 5% of the company's issued share capital and 1% of the voting rights in the company or a shareholder or shareholders holding at least 5% of the voting rights in the company provided that a demand by a shareholder for a shareholder meeting must set forth the items to be considered at that meeting and comply with all other requirements of the Articles of Association and any applicable law.

Despite the aforesaid, in accordance with the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, in foreign-traded Israeli company, the threshold for a shareholder who may demand that a general meeting be convened was increased from at least 5% of the share capital and 1% of the voting rights in the company, or 5% of the voting rights in the company to at least 10% of the share capital and 1% of the voting rights in the company, or 10% of the voting rights in the company (provided that where the foreign law sets a threshold which is lower than 10% the original threshold under the Israeli Companies Law shall apply as detailed in the paragraph above.

If a company's board of directors receives a demand to convene a special meeting, it must announce the scheduling of the meeting within 21 days after the demand was delivered.

The agenda at a general meeting is determined by the board of directors. The agenda must also include proposals for which the convening of a special meeting was demanded, as well as any proposal requested by one or more shareholders who hold at least 1% of the voting rights of the company, provided that all such demands must comply with the requirements of the articles of association, the Israeli Companies Law and any other applicable law. Pursuant to a company's articles of association, these requirements include requirements similar to those mentioned above with respect to a demand by a shareholder for a shareholders meeting.

The Israeli Companies Law and Articles of Association require that a notice of any annual general meeting or special general meeting be provided to shareholders at least 21 days prior to the meeting and if the agenda of the meeting includes the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, an approval of a merger or approval of dual office as chairperson of the Board of Directors and chief executive officer, notice must be provided at least 35 days prior to the meeting. Pursuant to the Articles of Association, the Company is not required to deliver personal notices of a general meeting or of any adjournment thereof to any shareholder. However, the Company will publish its decision to convene a general meeting in the manner prescribed by law. The shareholders entitled to participate and vote at the meeting are the

shareholders as of the record date set forth in the decision to convene the meeting, which may be between 4 and 40 days prior to the date of the meeting.

The quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy or represented by an authorized representative, who jointly hold or represent 5% or more of the Company’s issued and outstanding Common Shares. A meeting adjourned for lack of a quorum generally is adjourned to the same day in the following week at the same time and place or at another date, time and place as shall be set forth by the board of directors in a notice to all persons who are entitled to receive notice of general meetings. Should no legal quorum be present at such reconvened meeting a half hour following the time set for such meeting, the meeting will take place with whatever number of shareholders present, unless the meeting was called pursuant to a request by our shareholders, in which case the quorum required is the number of shareholders to call the meeting as described above.

The Chairperson of the Board of Directors (or in their absence, any director the Board of Directors appoints for this purpose, or in their absence, the Company’s CEO) will be the chairperson of any Company general meeting. If there is no such chairperson or if the chairperson is not present at any particular meeting within 15 minutes of the scheduled meeting start time, or if they refuse to act as chairperson of the meeting, the directors may elect one of the present officers as chairperson of the meeting. If no other director or officer is present or if all present directors or officers refuse to act as chairperson of the meeting, one of the shareholders or a representative of such a shareholder will be elected as chairperson of the meeting. If no shareholder is physically present, as stated above, the voting instrument will be used to authorize a Company representative to act as chairperson of the meeting, as stated above.

The Israeli Companies Law requires that resolutions regarding the following matters must be passed at a general meeting of the Corporation’s shareholders:

amendments to the Articles of Association;
appointment or termination of the Corporation’s external auditors;
appointment of External Directors;
approval of certain Related Party Transactions;
increases or reductions of our authorized share capital;
a merger; and
the exercise of the Board of Director’s powers by a general meeting, if the Board of Directors is unable to exercise its powers and the exercise of any of its powers is vital for the Corporation’s proper management.

A company may determine in its articles of association certain additional matters in respect of which resolutions by the shareholders at a general meeting will be required.

Generally, under the Articles of Association, shareholder resolutions (for example, resolutions for the appointment of auditors) are deemed adopted if approved by the holders of a simple majority of the

voting rights represented at a general meeting in person or by proxy and voting (excluding abstentions), unless a different majority is required by law or pursuant to the Articles of Association. A notable exception to the simple majority vote requirement is a resolution for the approval of a scheme of arrangement of the company pursuant to Section 350 of the Israeli Companies Law, which requires the approval of holders of 75% of the voting rights represented at the meeting and voting on the resolution.

Information Rights

Under the Israeli Companies Law, shareholders are provided access to: minutes of the Corporation’s general meetings; the Corporation’s shareholders register and principal shareholders register; articles of association and financial statements; and any document that we are required by law to file publicly with the Israeli Companies Registrar. In addition, shareholders may request to be provided with any document related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Israeli Companies Law. Shelfie may deny this request if in the Corporation’s opinion it has not been made in good faith or if such denial is necessary to protect the Corporation’s interest or protect a trade secret or patent or that the document’s disclosure may otherwise impair the Corporation’s interests.

Dividends

Shelfie may declare a dividend to be paid to the holders of the Corporation’s Common Shares in proportion to their respective shareholdings (See “Dividend Policy”). Under the Israeli Companies Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. The Corporation’s amended Articles of Association do not require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by the Corporation’s Board of Directors. Distributions (including dividend distributions) may be paid out of a company’s profits, provided that there is no reasonable concern that the distribution will prevent the company from satisfying its existing and foreseeable obligations as they become due. Pursuant to the Israeli Companies Law, the distribution amount is limited to the greater of retained earnings or earnings accumulated over the previous two years, according to the Corporation’s then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of the distribution. If a company does not qualify to effect a distribution as defined under the Israeli Companies Law, permission to effect the distribution may be granted by an order of an Israeli court. Prior to granting such order, the company is required to give notice of the proposed distribution to its creditors, who are entitled to file their objections with the court. The court may approve a request if it is convinced that there is no reasonable concern that the distribution will prevent a company from satisfying its existing and foreseeable obligations as they become due. The repurchase by a company of its own shares is considered a distribution under the Israeli Companies Law.

Despite the aforesaid, in accordance with the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, foreign-traded Israeli company may purchase its own shares even if it does not have the sufficient reserves required under the Israeli Companies Law for distribution, without seeking the court's permission, provided that: (a) the board of directors is if the opinion that the company is able to meet its outstanding financial obligations; (b) the company informs the public and its secured and/or material creditors of its plan to purchase its shares at least 30 days in

advance; and (c) if any creditor informs the company that it opposes such buy-back the company will be required to turn to the court and seek its permission.

Mergers and Acquisitions

Full Tender Offer. A person wishing to acquire shares of a public Israeli company and who would as a result of such acquisition hold over 90% of the target company’s voting rights or the target company’s issued and outstanding share capital (or of a class thereof), is required by the Israeli Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company (or the applicable class). If (a) the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company (or the applicable class) and the shareholders who accept the offer constitute a majority of the offerees that do not have a personal interest in the acceptance of the tender offer or (b) the shareholders who did not accept the tender offer hold less than 2% of the issued and outstanding share capital of the company (or of the applicable class), all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. A shareholder who had his or its shares so transferred may petition the court within six months from the date of acceptance of the full tender offer, regardless of whether such shareholder agreed to the offer, to determine whether the tender offer was for less than fair value and whether the fair value should be paid as determined by the court. However, an offeror may provide in the offer that a shareholder who accepted the offer will not be entitled to appraisal rights as described in the preceding sentence, as long as the offeror and the company disclosed the information required by law in connection with the tender offer. If the full tender offer was not accepted in accordance with any of the above alternatives, the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued and outstanding share capital (or of the applicable class) from shareholders who accepted the tender offer.

Merger. The Israeli Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain conditions described under the Israeli Companies Law are met, a majority of each party’s shareholders participating and voting at the shareholders’ meeting. The board of directors of a merging company is required pursuant to the Israeli Companies Law to discuss and determine whether in its opinion there exists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, such determination taking into account the financial status of the merging companies. If the board of directors determines that such a concern exists, it may not approve a proposed merger. Following the approval of the board of directors of each of the merging companies, the boards of directors must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies.

For purposes of the shareholder vote, unless a court rules otherwise, if one of the merging companies (or any person who holds 25% or more of the outstanding shares or the right to appoint 25% or more of the directors of one of the merging companies) holds shares in the other merging company, the merger will not be deemed approved if a majority of the shares voted at the shareholders meeting by shareholders other than the other party to the merger, or by any person who holds 25% or more of the outstanding shares or the right to appoint 25% or more of the directors of the other party, vote against the merger. In addition, if the non-surviving entity of the merger has more than one class of shares, the merger must be approved by each class of shareholders. If the transaction would have been approved but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the

voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders. If a merger is with a company's controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions with controlling shareholders.

Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure the rights of creditors.

Under the Israeli Companies Law, each merging company must inform its creditors of the proposed merger plans in accordance with the provisions of the Israeli Companies Law and its applicable regulations. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of any of the parties to the merger, and may further give instructions to secure the rights of creditors.

In addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the merger is filed with the Israeli Registrar of Companies and 30 days from the date that shareholder approval of both merging companies is obtained.

Register of Shareholders

A company must maintain, in addition to its shareholders register, a register of shareholders who hold 5% or more of its issued share capital or of its voting rights.

Fiduciary Duties of Office Holders

The Israeli Companies Law codifies the fiduciary duties that office holders owe to a company. A duty of care and a duty of loyalty are imposed on all office holders. The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances. The duty of loyalty requires that an office holder act in good faith and in the best interests of the company. The duty of care includes a duty to use reasonable measures to obtain: (i) information on the business expedience of a given action brought for his or her approval or performed by him or her by virtue of his or her position; and (ii) all other important information pertaining to these actions. The duty of loyalty includes a duty to: (i) refrain from any conflict of interest between the performance of his or her duties in the company and the performance of his or her other duties or his or her personal affairs; (ii) refrain from any activity that is competitive with the company's business; (iii) refrain from taking advantage of any business opportunity of the company to obtain a personal gain for himself or herself or others; and (iv) disclose to the company any information or documents relating to the company's affairs which the office holder received by virtue of his or her position as an office holder.

Under the Companies Law, a company may approve an act that would otherwise constitute a breach of the office holder's fiduciary duty, provided that the office holder acted in good faith, neither the act nor its approval harms the company, and the personal interest of the office holder is disclosed a

sufficient time before the approval of such act. Any such approval is subject to the terms of the Israeli Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval and the methods of obtaining such approval.

Exculpation, Insurance and Indemnification of Office Holders

Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. A company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care, but only if a provision authorizing such exculpation is included in its articles of association. The Articles of Association include such a provision. A company may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders.

A company may indemnify an office holder from the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association:

a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria;
reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction;
reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent;
expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; and
expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5748-1988.

An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association:

a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder;
a financial liability imposed on the office holder in favor of a third-party;
a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and
expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law.

A company may not indemnify or insure an office holder against any of the following:

a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
an act or omission committed with intent to derive illegal personal benefit; or
a fine, monetary sanction, or forfeit levied against the office holder.

Under the Companies Law, exculpation, indemnification, and insurance of office holders must be approved by the compensation committee and the board of directors (and, with respect to directors and the chief executive officer, by the shareholders). However, under regulations promulgated under the Companies Law, the insurance of office holders does not require shareholder approval and may be approved by only the compensation committee if the engagement terms are determined to be in accordance with the company’s compensation policy, which was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s profitability, assets, or obligations.

The Corporation intends to obtain directors’ and officers’ liability insurance for the benefit of the Corporation’s office holders and intends to continue to maintain such coverage and pay all premiums thereunder to the fullest extent permitted by the Israeli Companies Law. In addition, prior to the listing of the Corporation’s Common Shares, the Corporation intends to enter into agreements with each of the Corporation’s office holders undertaking to exculpate and indemnify them to the fullest extent permitted by the Israeli Companies Law. The maximum indemnification amount set forth in such agreements with respect to expenses and obligations under clause (i) in the preceding paragraph is limited to the greater of: an amount equal to 25% of the Corporation’s shareholder’s equity as reflected

in the Corporation's most recent consolidated financial statements prior to the date on which the indemnity payment is made; or US $5 million.

Board Meetings

A board of directors shall meet in accordance with the company's needs, provided that meetings shall be convened at least once every three months.

Directors' Compensation

Compensation of directors requires the approval of the company's compensation committee, followed by the board of directors and finally the approval of shareholders. However, according to regulations promulgated under the Israeli Companies Law with respect to the remuneration of External Directors, the compensation committee and shareholder's approval may be waived if the remuneration to be paid to the External Directors is between the fixed and maximum amounts set forth in the Remuneration Regulations.

According to the regulations promulgated under the Israeli Companies Law concerning the remuneration of External Directors (the "Remuneration Regulations"), External Directors are generally entitled to an annual fee, a participation fee for each meeting of the board of directors or any committee of the board of directors on which he or she serves as a member, and reimbursement of travel expenses for participation in a meeting which is held outside of the External Director's area of residence. The minimum, fixed and maximum amounts of the annual and participation fees are set forth in the Remuneration Regulations, based on the classification of the company according to the amount of its capital. According to the Remuneration Regulations, the compensation committee and shareholder's approval may be waived if the annual and participation fees to be paid to the External Directors are within the range of the fixed annual fee or the fixed participation fee and the maximum annual fee or the maximum participation fee for the company's level, respectively. However, remuneration of an External Director in an amount which is less than the fixed annual fee or the fixed participation fee, respectively, requires the approval of the compensation committee, the board of directors and the shareholders (in that order). The remuneration of External Directors must be made known to the candidate for such office prior to his/her appointment and, subject to certain exceptions, will not be amended throughout the three-year period during which he or she is in office. A company may compensate an External Director in shares or rights to purchase shares, which may be converted into shares, in addition to the annual remuneration, the participation fee and the reimbursement of expenses, subject to certain limitations set forth in the Remuneration Regulations.

Additionally, according to other regulations promulgated under the Israeli Companies Law, shareholders' approval for directors' compensation and employment arrangements is not required if both the compensation committee and the board of directors resolve that either: (i) the directors' compensation and employment arrangements are solely for the benefit of the company; or (ii) the remuneration to be paid to any such director does not exceed the maximum amounts set forth in the Remuneration Regulations.

The directors are also entitled to be paid reasonable travel, hotel and other expenses expended by them in attending board meetings and performing their functions as directors of the Company, according to the policy of the company from time to time and subject to obtaining required corporate approvals.

Audit Committee

A public company must have an audit committee (an “Audit Committee”) comprised of at least three directors, all of the External Directors shall be members of the Audit Committee, and the majority of its members shall be independent (as defined in the Israeli Companies Law).

In general, an “independent director” under the Israeli Companies Law is defined as either an External Director or as a director who meets the following criteria: (a) he or she meets the qualifications for being appointed as an External Director, except for the requirement that the director: (i) be an Israeli resident (which does not apply to companies such as the Corporation’s whose securities have been offered outside of Israel or are listed for trading outside of Israel); and (ii) have accounting and financial expertise or professional qualifications; and (b) he or she has not served as a director of the company for a period exceeding nine consecutive years. For this purpose, a break of less than two years in his or her service as a director shall not be deemed to interrupt the continuity of the service.

The Audit Committee must not include the chairperson of the board of directors, any Controlling Shareholder or a relative of a Controlling Shareholder or any director employed by the company or by the company’s Controlling Shareholder or by an entity under the control of the company’s Controlling Shareholder, or who provides services, on a regular basis, to the company, to its controlling shareholder or to any entity under the control of such controlling shareholder, as well as any director whose principal livelihood derives from the company’s controlling shareholder. The chairperson of the Audit Committee shall be one of the External Directors.

The Corporation has determined that Ms. Lilach Lotan, Ms. Yehudit Halpern, Mr. Zaler Mordchai Salom Iosf and Mr. Haim Alkoby are all independent (as defined in the Israeli Companies Law) as well as being Independent Directors.

Compensation Committee

A public company must have a compensation committee comprised of at least three directors, including all of the External Directors who must be the majority members and one thereof must serve as the chairperson of the committee, and all the remaining members must receive remuneration for their service as directors of the company, in accordance with the regulations under the Israeli Companies Law governing the remuneration of the External Directors. The compensation committee is subject to the same Israeli Companies Law restrictions as are applicable to the Audit Committee with respect to who may not be a member of such committee.

The compensation committee is responsible for: (i) making recommendations to the board of directors with respect to the approval of the compensation policy (see below) and any extensions thereof; (ii) periodically reviewing the implementation of the compensation policy and providing the board of directors with recommendations with respect to any amendments or updates thereto; (iii) reviewing and resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; and (iv) determining whether or not to exempt a transaction with a candidate for chief executive officer from shareholder approval.

Attendance and participation in the meetings of the compensation committee are limited, in a manner similar to the limitations on attendance and participation in meetings of the Audit Committee. The

quorum for discussions and decisions shall be the majority of the members, provided that at least one of them is an External Director.

The Corporation has determined that Ms. Lilach Lotan, Mr. Haim Alkoby and Ms. Yehudit Halpern shall be members of the Compensation committee and that Ms. Yehudit Halpern shall be the chairperson of the committee.

Compensation Policy

The compensation policy must be approved within nine months following the company’s public listing by the board of directors, after considering the recommendations of the compensation committee, and by a majority of the Corporation’s shareholders present and voting, provided that: (i) such majority includes at least a majority of the shareholders who are not Controlling Shareholders and who do not have a personal interest in the matter, present and voting (abstentions are disregarded), or (ii) the non-Controlling Shareholders and shareholders who do not have a personal interest in the matter who were present and voted against the policy hold two percent or less of the voting power of the company. The compensation policy must be reviewed from time to time by the board of directors, and must be re-approved or amended by the board of directors and the shareholders at least every three years. Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed grounds, and after discussing again with the compensation committee, that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the company.

The compensation policy must be based on certain considerations and include certain provisions and reference certain matters as set forth in the Companies Law. The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of office holders, including exculpation, insurance, indemnification, or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policy must be determined and later reevaluated according to certain factors, including: the advancement of the company’s objectives, business plan and long-term strategy; the creation of appropriate incentives for office holders, while considering, among other things, the company’s risk management policy; the size and the nature of the company’s operations; and with respect to variable compensation, the contribution of the office holder towards the achievement of the company’s long-term goals and the maximization of its profits, all with a long-term objective and according to the position of the office holder. The compensation policy must furthermore consider the following additional factors:

the education, skills, experience, expertise, and accomplishments of the relevant office holder;
the office holder’s position and responsibilities;
prior compensation agreements with the office holder;
the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, and in particular the ratio between such cost to the average and median salary of such employees of the company, as well as possible impacts of compensation disparities between them on the work relationships in the company;

if the terms of employment include variable components, the possibility of reducing variable components at the discretion of the board of directors and setting a limit on the value of non-cash variable equity-based components; and
if the terms of employment include severance compensation, the term of employment or office of the office holder, the terms of the office holder’s compensation during such period, the company’s performance during such period, the office holder’s individual contribution to the achievement of the company goals and the maximization of its profits, and the circumstances under which the office holder is leaving the company.

The compensation policy must also include, among other things:

with the exception of office holders who report to the chief executive officer, a means of determining the variable components on the basis of long-term performance and measurable criteria; provided that the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, or if such amount is not higher than three months’ salary per annum, taking into account such office holder’s contribution to the company; or
the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their payment, or in the case of equity-based compensation, at the time of grant.
a condition under which the office holder will refund to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of the office holder’s terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was restated in the company’s financial statements;
the minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and
a limit to retirement grants.

Internal Auditor

The board of directors of a public company must appoint an internal auditor proposed by the Audit Committee. The role of the internal auditor is to examine, among other things, whether the company’s actions comply with the Israeli law and orderly business procedures. The internal auditor must not be an “interested party” or an office holder, or a relative of an interested party or office holder, or a member of the company’s external auditors or anyone on his or her behalf. The Israeli Companies Law defines “interested party” to include a person who holds 5% or more of the company’s outstanding share capital or voting rights, a person who has the right to appoint one or more directors or the chief executive officer or any person who serves as a director or a chief executive officer. The identity of the internal auditor must comply with certain other provisions of Israeli law relating to his or her domicile, qualification and other matters.

The Audit Committee is required to examine the activities and to assess the performance of the internal auditor as well as to review the internal auditor’s work plan. The Corporation intends to appoint an internal auditor following the listing of the Corporation’s Common Shares.

Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions

The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest and all related material information known to such office holder concerning any existing or proposed transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of one's relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director, or general manager or in which such person has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from one's ownership of shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to the officer holder's vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter.

If it is determined that an office holder has a personal interest in a non-extraordinary transaction (meaning any transaction that is in the ordinary course of business, on market terms or that is not likely to have a material impact on the company's profitability, assets or liabilities), the transaction needs to be approved by the board of directors unless the company's articles of association provide for a different method of approval. Any such transaction that is adverse to the company's interests may not be approved by the board of directors.

Any extraordinary transaction (meaning any transaction that is not in the ordinary course of business, not on market terms or that is likely to have a material impact on the company's profitability, assets or liabilities) in which an office holder has a personal interest needs to be approved first by the company's audit committee and then by the board of directors.

A director and any other office holder who has a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee generally (unless it is with respect to a transaction which is not an extraordinary transaction) may not be present at such a meeting or vote on that matter unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority of the members of the audit committee or the board of directors have a personal interest in the matter, then all of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction and vote on the approval thereof. In such case, if the audit committee and board of directors approve such transaction, the subsequent approval of the shareholders is also required.

Certain disclosure and approval requirements apply under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a personal interest, and certain arrangements regarding the terms of service or employment of a controlling shareholder. For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company's actions, including any shareholder holding 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in the company. Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be one shareholder.

Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions

Pursuant to the Israeli Companies Law, the disclosure requirements regarding personal interests that apply to directors and other officers also apply to a Controlling Shareholder of a public company. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated. The approval of the Audit Committee, the board of directors and the shareholders of the company, in that order, is required for (a) extraordinary transactions with a Controlling Shareholder or in which a Controlling Shareholder has a personal interest, (b) the engagement with a Controlling Shareholder or his or her relative, directly or indirectly, for the provision of services to the company, (c) the terms of engagement and compensation of a Controlling Shareholder or his or her relative who is an office holder or (d) the employment of a Controlling Shareholder or his or her relative by the company, who is not an office holder. In addition, the shareholder approval requires one of the following:

at least a majority of the shares held by all shareholders who do not have a personal interest in the transaction and who are present and voting at the meeting approves the transaction, excluding abstentions; or
the shares voted against the transaction by shareholders who have no personal interest in the transaction and who are present and voting at the meeting do not exceed 2% of the voting rights in the company.

The approval of a transaction with a Controlling Shareholder is contingent upon such transaction being beneficial to the company.

To the extent that any such transaction with a Controlling Shareholder is for a period extending beyond three years, approval is required once every three years, provided, however, that with respect to transactions other than with respect to terms of engagement, compensation or employment, the Audit Committee may determine that a longer duration of the transaction is reasonable given the circumstances related thereto.

Arrangements regarding the compensation, indemnification or insurance of a controlling shareholder in his or her capacity as an office holder require the approval of the compensation committee, board of directors and shareholders by a Special Majority and the terms thereof should be consistent with the company's stated compensation policy (apart from a number of specific exceptions).

Pursuant to regulations promulgated under the Israeli Companies Law, certain transactions with a controlling shareholder or his or her relative, or with directors, that would otherwise require approval of a company's shareholders may be exempt from shareholder approval upon certain determinations of the Audit Committee or the compensation committee, together with the board of directors.

SELECTED FINANCIAL INFORMATION

read in conjunction with such Financial Statements and the related notes, along with the management’s discussion and analysis relating to such Financial Statements and also included in Schedule “A”.

The following sets out selected summary financial information of the Corporation for the years ended December 31, 2022 and December 31, 2023 and for the nine month period ending September 30, 2024:

	For the year ended December 31, 2022 (audited) (1) (USD)	For the year ended December 31, 2023 (audited) (1) (USD)	For the nine-month period ended September 30, 2024 (unaudited) (1) (USD)
Total Assets	$351,887	$105,885	$98,033
Total Expenses	$1,099,908	$589,144	$80,535
Current Liabilities	$215,523	$340,780	$371,112
Shareholders’ Equity (Deficit)	$136,364	($234,895)	($273,079)
Net and comprehensive loss for the year	$1,099,908	$589,144	$80,535
Basic and diluted loss per Shelfie Ordinary Share	$0.06^{(2,3,4)}	$0.03^{(2,3,4)}	$0.00^{(2,3,4)}

Notes:
(1) The information presented is derived from Shelfie’s audited and unaudited financial statements which are prepared in accordance with IFRS and presented in United States dollars.
(2) On July 27, 2023, Shelfie effected a 1 for 5,294 forward stock split of its Common Shares. All Common Share and per Common Share amounts have been retroactively restated for all periods presented.
(3) On April 15, 2024, Shelfie completed a share consolidation of its Common Shares on a 3.96901:1 basis. All Common Share and per Common Share amounts have been retroactively restated for all periods presented.
(4) On October 8, 2024, Shelfie effected a 1-for-1.0004 forward stock split of its Common Shares. All Common Share and per Common Share amounts have been retroactively restated for all periods presented.

MANAGEMENT’S DISCUSSION AND ANALYSIS

The Corporation’s management discussion and analysis for the years ended December 31, 2022, and December 31, 2023 and for the nine month period ending September 30, 2024, is included in Schedule “A” to this Prospectus.

DESCRIPTION OF SHARE CAPITAL

Common Shares

The authorized capital of the Corporation consists of 1,600,000,000 Common Shares. On July 27, 2023, Shelfie completed a share split of its Common Shares on a 1:5,294 basis, on April 15 2024, Shelfie completed a share consolidation of its Common Shares on a 3.96901:1 basis and on October 8, 2024, Shelfie effected a 1-for-1.0004 forward stock split of its Common Shares (“Share Adjustments”). All share information relating to Shelfie has been retroactively restated to reflect the Share Adjustment. As of the date of this Prospectus, there are 20,974,640 Common Shares issued and outstanding. Holders of Common Shares are entitled to vote at meetings of shareholders, to receive

any dividends declared by the Corporation, and to receive the remaining property of the Corporation upon dissolution. See also “Shareholder Rights, Directors’ Obligations a Comparative Law Summary”.

Warrants

As of the date of this Prospectus, there are no warrants of the Corporation issued and outstanding.

Subscription Receipts

As of the date of this Prospectus 1,864,617 Subscription Receipts have been issued. The Subscription receipts will automatically convert into Common Shares and will be deemed to have been exercised without any further action or payment on the part of the holder thereof on the first business day following the fulfillment of the last of the Restricted Share Release Conditions.

Awards

The Board adopted an omnibus compensation plan effective April, 2024 a copy of which is attached hereto as Schedule “B” (the “Omnibus Compensation Plan”). As of the date of this Prospectus, an aggregate of no Options or RSUs are outstanding, See “Executive Compensation – Elements of Compensation Program – Omnibus Compensation Plan.”

CONSOLIDATED CAPITALIZATION

The following table sets forth the share capital of the Corporation as at the dates shown below. The table should be read in conjunction with, and is qualified in its entirety by the Financial Statements.

Description	Authorized Capital	Outstanding as at December 31, 2023	Outstanding as at the date of this Prospectus
Common Shares	Unlimited	19,855,378	20,974,640
Warrants	Unlimited	Nil	nil
Awards	Up to 10% of the outstanding Common Shares	Nil	nil
Subscription Receipts	Unlimited	Nil	1,864,617

PRIOR SALES

The following table summarizes details of the Common Shares issued by the Corporation during the 12-month period prior to the date of this Prospectus.

Date Of Issuance	Description of Transaction	Price per Security	Number of Securities
January 1, 2023 to January 25, 2023	Common Shares	US$1.00	60,256
September 30, 2023	Common Shares	US$0.66	237,897
April 10, 2024	Issuance of Common Shares pursuant to compensation for lower valuation	US$0.66	144,622
June 18, 2024	Issuance of Common Shares in a private placement	US$0.65	65,548
November- December, 2024	Issuance of Subscription Receipts	US$0.66	1,792,469
December, 2024	Issuance of Common Shares in a private placement	US$0.66	909,092
January, 2025	Issuance of Subscription Receipts	US$0.66	72,148

Trading Price and Volume

The Corporation's Common Shares currently are not listed and do not trade on any stock exchange. The Corporation is in the process of applying to have its Common Shares listed on the CSE; it is anticipated that the listing of the Common Shares on the CSE will be subject to the Corporation satisfying certain conditions of the CSE.

ESCROWED SECURITIES

Pursuant to the Escrow Agreement, certain of the securities of the Corporation are subject to escrow as shown in the following table:

Class	Number of Securities Held in Escrow(1)	Percentage of Class
Common Shares	11,710,221	55.83%

Notes:

(1) These Common Shares are held under the Escrow Agreement in accordance with NP 46-201 with the Escrow Agent.

NP 46-201 provides that all shares of an issuer owned or controlled by its Principals will be escrowed at the time of the issuer's initial public offering. At the time of its initial public offering, an issuer will be classified for the purposes of escrow as either an "exempt issuer", an "established issuer" or an "emerging issuer" as those terms are defined in NP 46-201. As the Corporation anticipates that its Common Shares will be listed on the CSE, it will be classified as an "emerging issuer". As an emerging issuer, the Escrow Agreement reflects the following automatic timed releases of the securities deposited in escrow with the Escrow Agent:

Date of Automatic Timed Release
Number of Escrowed Securities Released

On the Listing Date	1/10 of the escrowed securities
6 months from the Listing Date	1/6 of the remaining escrowed securities
12 months from the Listing Date	1/5 of the remaining escrowed securities
18 months from the Listing Date	1/4 of the remaining escrowed securities
24 months from the Listing Date	1/3 of the remaining escrowed securities
30 months from the Listing Date	1/2 of the remaining escrowed securities
36 months from the Listing Date	The remaining escrowed securities

Assuming there are no changes to the escrowed securities initially deposited and no additional escrowed securities are deposited, automatic timed release escrow applicable to the Corporation will result in a 10% release on the Listing Date, with the remaining escrowed securities being released in 15% tranches every six months thereafter.

The automatic timed release provisions under NP 46-201 pertaining to "established issuers" provide that 25% of each Principal's and shareholder's escrowed securities are released on the Listing Date, with an additional 25% being released in equal tranches at six month intervals over eighteen months. If, within eighteen months of the Listing Date, the Corporation meets the "established issuer" criteria as set out in NP 46-201, the escrowed securities will be eligible for accelerated release available for established issuers. In such a scenario, that number of escrowed securities that would have been eligible for release from escrow if the Corporation had been an "established issuer" on the Listing Date will be immediately released from escrow. The remaining escrowed securities would be released in accordance with the timed release provisions for established issuers, with all escrowed securities being released eighteen months from the Listing Date.

PRINCIPAL SHAREHOLDERS

As of the date of this Prospectus, to the knowledge of the directors and officers of the Corporation, no person beneficially owns or exercises control or direction over Common Shares carrying more than 10% of the votes attached to Common Shares, except for the following:

Name	Type of Ownership	Number of Common Shares Owned	Percentage of Outstanding Shares (1)
Ben Tsur Joseph	Beneficial and of record	11,710,221	55.83%
Notes:

(1) Calculated on a fully-diluted basis.

MANAGEMENT

The following table sets out, for each of the Corporation's directors and executive officers, the person's name, age, province or state and country of residence, position with us, principal occupation and, if a director, the date on which the person became a director. The Corporation's directors are expected to

hold office until the Corporation's next annual general meeting of shareholders. The Corporation's directors are elected annually and, unless re-elected or replaced, retire from office at the end of the next annual general meeting of shareholders, provided however, that the Corporation's External Directors are appointed and hold office for three-year terms in accordance with the Israeli Companies Law. (See "Noteworthy Features of Israeli Corporate Law"). As a group, the directors and executive officers beneficially own, or control or direct, directly or indirectly, a total of 11,710,221 Common Shares, representing 55.83% of the Common Shares outstanding. As of the date of this prospectus, Shelfie does not have any Directors & Officers Liability Insurance. The Corporation expects to acquire Directors & Officers Liability Insurance immediately prior to commencing trading on the CSE.

Employees

Shelfie expects that upon successful commercialization it will, if determined by management of Shelfie to be beneficial for the purpose of maintaining individuals on a long-term basis, convert one or more consultant arrangements to that of employer/employee relations which changes, if they occur, are not expected to cause any material change in the ongoing cashflow of Shelfie.

Directors and Executive Officers

Name and Province or State and Country of Residence	Age	Position with the Corporation	Director Since	Principal Occupation	Percentage of Common Shares owned
Ben Tsur Joseph
Yavne, Israel	64	Chairperson and Chief Executive Officer	Incorporation	Chief Executive Officer of Shelfie since November 18, 2021.	55.83%
				Chief Executive Officer and Director of A2Z Cust2Mate Solutions Corp. since 1998.
Alan Rootenberg
Toronto, Canada	71	Chief Financial Officer, Director and Corporate Secretary	October 30, 2024	Director of A2Z Cust2Mate Solutions Corp. since May 2020.	0%
				CFO of BioHarvest Sciences Inc., a bio-farming company, since November 2018.
				Director of Clearmind Medicine Inc., a psychedelic drug company, since June 2022.
				Director of Solvbl Solutions Inc., a data security solutions company, since March 2021

Name and Province or State and Country of Residence	Age	Position with the Corporation	Director Since	Principal Occupation	Percentage of Common Shares owned
				CFO of Eco (Atlantic) Oil& Gas Ltd., an oil and gas exploration company, since November 2011.
Yehudit Halpern
Bnei Brak, Israel	30	Director	October 30, 2024	Advertiser and content writer for commercial and private companies	0%
Zaler Mordchai Salom
Iosf
Bnei Brak, Israel	31	Director	October 30, 2024	Senior lecturer in Jewish law at an Israeli Institute of Higher Jewish Education.	0%
Haim Alkoby
Beit Zait, Israel		Director	October 30, 2024	Entrepreneur and real estate developer. One of the owners of the successful "HaStock" chain in Israel.	0%
Lilach Lotan
Rishon Lezion, Israel		Director	October 30, 2024	Educator and teacher of Hebrew language and civic education. Practiced law as an attorney specializing in banking and finance at a top firm in Israel.	0%

Biographies

The following are brief profiles of the Corporation’s executive officers and directors, including a description of each individual’s principal occupation within the past five years.

Ben Tsur Joseph (64), Chairperson and Chief Executive Officer

Mr. Joseph is a serial entrepreneur with a proven track record in establishing successful corporations and expanding them into new markets and industries. He is the CEO of A2Z Cust2Mate Solutions Corp. (Nasdaq - AZ) (TSXV - AZ). He previously held the following posts: a) Chairman at Elad Hotels – part of the Tshuva Group, one of the largest groups in Israel; b) Director at MARLAZ – public holding company which controls several publicly traded companies in the industrial, real estate, communication, and hi-tech industries; c) Operations Manager at Comfy Interactive Movies – a leading publicly quoted Edutainment public company; and d) CEO at DIG Ltd. – public company which produces and sells electric components to the largest shops and chain stores throughout Israel.

As Chief Executive Officer of the Corporation, working jointly with the Chief Financial Officer, Mr. Ben Tsur Joseph will be responsible for management of the affairs of the Corporation, reporting directly to the Corporation Board. Mr. Ben Tsur Joseph intends to devote approximately 75% of his working time to the affairs of the Corporation. See “Executive Compensation – Employee Agreements and Termination and Change of Control Benefits” below.

Mr. Ben Tsur Joseph has entered into a consulting agreement with the Corporation that includes a non-competition/non-disclosure clause.

Alan Rootenberg (71), Chief Financial Officer and Corporate Secretary

Mr. Rootenberg is a chartered professional accountant who has served as the Chief Financial Officer of a number of publicly traded companies listed on the TSX, TSX Venture Exchange, OTCBB and CSE. These companies include mineral exploration, mining, technology and cannabis companies. Mr. Rootenberg has a Bachelor of Commerce degree from the University of the Witwatersrand in Johannesburg, South Africa and received his CPA designation in Ontario, Canada.

Mr Rootenberg served in the past five years as a (i) director of A2Z Cust2Mate Solutions Corp. (this organization is still carrying on business); (ii) CFO of BioHarvest Sciences Inc. (this organization is still carrying on business); (iii) CFO of Clearmind Medicine Inc. (this organization is still carrying on business); (iv) CFO of Eco (Atlantic) Oil & Gas Ltd. (this organization is still carrying on business); (v) CFO of Anteros Metals Inc. (this organization is still carrying on business); and (vi) director of SoLVBL Solutions Inc (this organization is no longer carrying on business).

As Chief Financial Officer of the Corporation, working jointly with the Chief Executive Officer, Mr. Rootenberg will be responsible for management of the affairs of the Corporation, reporting directly to the Corporation Board. Mr. Rootenberg intends to devote approximately 25% of his working time to the affairs of the Corporation. Upon entering commercial production Shelfie expects to hire additional individuals to provide the required framework for adequate controls and reporting relating to the financial condition of the Company to assist the CFO in completing the CFO's tasks and responsibilities. See "Executive Compensation – Employee Agreements and Termination and Change of Control Benefits" below.

Mr. Rootenberg has entered into a consulting agreement with the Corporation that includes a non-disclosure clause.

Yehudit Halpern (31), Director

Ms. Halpern is advertiser and content writer for commercial and private companies. Yehudit has 10 years of experience in the world of advertising and productions. Ms. Halpern serves as a director of an institute for personal and professional development for women writers. In her role as director, Ms. Halpern oversees the accounting and bookkeeping of the company she is providing services to and us such, has a strong understanding of financial statements and procedures. Ms. Halpern is a fellow at the Mandel Institute for Leadership Development Graduated from ACC College for Creative Studies, advertising course at "Habetzer" and coaching at "Dale Carnegie". Ms. Halpern has been classified by the Board of Directors to serve as an Independent Director. In addition, Ms. Halpern has been designated by the Board of Directors to serve as an External Director in accordance with the Israeli Companies Law. Ms. Halpern's election as External Director will be presented for a vote of the shareholders at a general meeting of shareholders to be held within three months after the completion of the listing under this prospectus. Ms. Halpern expects to devote 25% of her time to the Corporation in order to effectively fulfill her duties.

Zaler Mordchai Salom Iosf (32), Director

Mr. Salom Iosf is a senior lecturer in Jewish Law at an Israeli Institute of Higher Jewish Education. Mr. Salom Iosf. Mr. Salom Iosf has been classified by the Board of Directors to serve as an Independent Director. Mr. Salom Iosf expects to devote 25% of his time to the Corporation in order to effectively fulfill his duties.

Lilach Lotan (36), Director

Ms. Lotan is a dedicated educator and teacher passionate about Hebrew language and civic education. Prior to her teaching career, Ms. Lotan practiced law as an attorney specializing in banking and finance at a top firm in Israel. Ms. Lotan has been classified by the Board of Directors to serve as an Independent Director. Ms. Lotan has a Bachelor of Law from the Ono Academic College in Kiryat Ono, Israel, and M.A. in Law from Bar Ilan University. Ms. Lotan also received teaching certificate from Levinsky College.

Ms. Lotan legal background has equipped her with a deep understanding of financial intricacies, which is now integrated into her teaching to provide students with practical insights and knowledge. Ms. Lotan expects to devote 25% of her time to the Corporation in order to effectively fulfill her duties.

Haim Alkoby, Director

Mr. Alkoby is a successful entrepreneur and real estate developer. Mr. Alkoby is one of the owners of the successful "HaStock" chain in Israel. Mr. Alkoby has been classified by the Board of Directors to serve as an Independent Director. In addition, Mr. Alkoby shall join the Board of Directors upon listing and he has been designated by the Board of Directors to serve as an External Director in accordance with the Israeli Companies Law. Mr. Alkoby expects to devote 25% of his time to the Corporation in order to effectively fulfill his duties.

Corporate Cease Trade Orders

Other than as described below, none of the Corporation's directors or executive officers has, within the 10 years prior to the date of this Prospectus, been a director, chief executive officer or chief financial officer of any company (including us) that, while such person was acting in that capacity (or after such person ceased to act in that capacity but resulting from an event that occurred while that person was acting in such capacity) was the subject of a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, in each case for a period of more than 30 consecutive days.

On May 5, 2023, the Ontario Securities Commission (the "OSC") issued a cease trade order under National Policy 11-207 Failure-to-File Cease Trade Orders (the "FFCTO") to SoLVBL Solutions Inc. ("SoLVBL"), a company listed on the Canadian Securities Exchange and of which Alan Rootenberg was a director. The OSC revoked the FFCTO on June 14, 2023. The OSC issued another FFCTO to SoLVBL on December 5, 2023, which remains active as of the date of this Prospectus.

Corporate Bankruptcies

None of the Corporation’s directors, executive officers or shareholders holding a sufficient number of securities to affect materially the control of the Corporation, has, within the 10 years prior to the date of this Prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or comprise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, been a director or executive officer of any company, that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or comprise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

Subsequent to Alan Rootenberg’s resignation in December 2023 as a director of SoLVBL, SoLVBL filed for an assignment in bankruptcy on December 21, 2023.

Penalties or Sanctions

No director or executive officer or shareholder holding sufficient securities of the Corporation to affect materially the control of the Corporation has:

been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor making an investment decision.

Conflicts of Interest

Ben Tsur Joseph (Chief Executive Officer and a Director), holds the same titles with respect to A2Z Cust2Mate Solutions Corp. (“A2Z”), and Alan Rootenberg (Chief Financial Officer) serves as a director of A2Z.A2Z and the Corporation share premises for their respective operations and have a number of agreements in place to govern their relationship including the following:

(1) Lease Agreement – Pursuant to a lease agreement entered into as of January 18, 2021 the Corporation rents office space from A2Z Cust2Mate Solutions Corp., a wholly owned subsidiary of A2Z.

(2) Share purchase agreements – A2Z has participated in equity financings of the Corporation for aggregate gross proceeds of US$200,000 on terms which were identical to arms leg the third parties participating in such financing rounds.

(3) The M&S Consulting Agreement (as hereinafter defined. See “Executive Compensation - Employee Agreements and Termination and Change of Control Benefits”).

Consequently, there are potential inherent conflicts of interest in the aforementioned directors and officers acting as directors and officers of the Corporation between their duties to the Corporation and their duties to such other companies. Although the officers and directors are engaged in other business activities, the Corporation anticipates they will devote a significant amount of time to the affairs of the Corporation.

The Corporation’s officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to the Corporation’s. Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities. Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise. Currently, the Corporation does not have a right of first refusal pertaining to opportunities that come to their attention and may relate to the Corporation’s business operations.

The Corporation’s officers and directors are, so long as they are the Corporation’s officers or directors, subject to the restriction that all opportunities contemplated by the Corporation’s plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to the Corporation and the companies that they are affiliated with on an equal basis. A breach of this requirement will be a breach of the fiduciary duties of the officer or director. If the Corporation or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity. However, all directors may still individually take advantage of opportunities if the Corporation should decline to do so subject to applicable law. Except as set forth above, the Corporation has not adopted any other conflict of interest policy with respect to such transactions.

EXECUTIVE COMPENSATION

Introduction

The following discussion describes the significant elements of the Corporation’s executive compensation program, with particular emphasis on the process for determining compensation payable to the Corporation’s CEO and CFO and the Corporation’s next most highly-compensated executive officer whose total compensation was more than $150,000 (collectively, the “Named Executive Officers” or “NEOs”). The NEO’s of the Corporation are Ben Tsur Joseph (Chair of the Board and Chief Executive Officer), and Alan Rootenberg (Chief Financial Officer).

Overview

The Corporation’s Board of Directors following the approval of the Compensation Committee, makes decisions regarding all forms of compensation, including salaries, bonuses and equity incentive compensation for the Corporation’s CEO, CFO and other executive officers, as well as approves corporate goals and objectives relevant to their compensation.

Compensation Objectives

The Corporation’s compensation practices are designed to retain, motivate and reward the Corporation’s executive officers for their performance and contribution to the Corporation’s long-term success. The Corporation seeks to compensate executive officers by combining short-term and long-term cash and equity incentives. It also seeks to reward the achievement of corporate and individual performance objectives and to align executive officers’ incentives with the Corporation’s performance.

The Corporation seeks to tie individual goals to the area of the senior executive officer’s primary responsibility. These goals may include inter-alia the achievement of specific financial or business development goals. Corporate performance goals may be based inter-alia on the Corporation’s financial performance during the applicable financial year.

In order to achieve the Corporation’s growth objectives, attracting and retaining the right team members is critical. A key part of this is a well thought out compensation plan that attracts high performers and compensates them for continued achievements.

The Corporation’s compensation policy, a copy of which is attached hereto as Schedule “C”, is designed to retain and motivate the Corporation’s directors and executive officers, incentivize superior individual excellence, align the interests of the Corporation’s directors and executive officers with the Corporation’s long-term performance, and provide a risk management tool. To that end, a portion of the Corporation’s executive officer compensation package is targeted to reflect the Corporation’s short and long-term goals, as well as the executive officer’s individual performance. The compensation policy also includes measures designed to reduce the executive officer’s incentives to take excessive risks that may harm the Company in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer, and minimum vesting periods for equity-based compensation.

The compensation that may be granted to an executive officer may include: base salary, annual bonuses, and other cash bonuses (such as a signing bonus, retention bonus, issuance bonus, special bonuses, equity-based compensation, benefits and retirement and termination of service arrangements). All cash bonuses are limited to a maximum amount. In addition, the Corporation’s compensation policy provides for a recommended maximum ratio between the total variable (cash bonuses and equity-based compensation) and total compensation package (fixed compensation, cash bonuses and equity-based compensation), in accordance with an officer’s respective position with the company.

Pursuant to the Corporation’s compensation policy, an annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. The annual cash bonus that may be granted to the Corporation’s executive officers, will be based on performance objectives and a discretionary evaluation of the executive officer’s overall performance. The annual cash bonus that may be granted to the Corporation’s CEO or to the Corporation’s Chairperson or to an active director, may alternatively be based entirely on performance objectives. Furthermore, the Corporation’s CEO or the Corporation’s compensation committee or the Corporation’s board of directors will be entitled to approve performance objectives for executive officers who report to the Corporation’s CEO.

The measurable performance objectives of the Corporation’s Chief Executive Officer will be determined annually by the Corporation’s compensation committee and board of directors. A less significant portion of the Chief Executive Officer’s annual cash bonus, as provided in the Corporation’s compensation policy, may be based on a discretionary evaluation of the Chief Executive Officer’s overall performance by the compensation committee and the board of directors.

Under the Corporation’s compensation policy, the Corporation’s executive officers’ (including members of the Corporation’s board of directors) equity-based compensation is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus,

with its main objectives being to enhance the alignment between the executive officers' interests with the Corporation's long-term interests and those of the Corporation's shareholders and to strengthen the retention and the motivation of executive officers in the long term. The Corporation's compensation policy provides for executive officer compensation in the form of share options or other equity-based awards, such as restricted shares and restricted share units, in accordance with the Corporation's then-current equity incentive plan. All equity-based incentives granted to executive officers shall be subject to vesting periods in order to promote long-term retention of those executive officers. Equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role, and the personal responsibilities of the executive officer.

In addition, the Corporation's compensation policy contains compensation recovery provisions which allow us, under certain conditions, to recover bonuses paid in excess, enable the Corporation's CEO to approve an immaterial change in the terms of employment of an executive officer who reports directly him (provided that such changes are in accordance with the Corporation's compensation policy), and allow us to exculpate, indemnify, and insure the Corporation's executive officers and directors subject to certain limitations permitted by Israeli law.

The Corporation's compensation policy also provides for compensation to the members of the Corporation's board of directors either (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, as such regulations may be amended from time to time, or (ii) in accordance with the amounts determined in the Corporation's compensation policy.

Many of the Corporation's team members participate in the Omnibus Compensation Plan, driving retention and ownership. Communicating clear and concrete criteria and process for merit-based increases and bonuses will also motivate the entire team to achieve individual and corporate goals.

Elements of Compensation Program

The Corporation's executive compensation consists primarily of three elements: base salary, annual bonuses and long-term equity incentives.

Base Salary

Base salaries for executive officers are established based on the scope of their responsibilities and their prior relevant experience, taking into account compensation paid by other companies in the industry for similar positions and the overall market demand for such executives at the time of hire. The Corporation does not actively benchmark its compensation to other companies, but has reviewed the public disclosure available for other comparable companies to assist in determining the competitiveness of base salary, bonuses, benefits and stock options paid to the executive officers of the Corporation. An executive officer's base salary is determined by reviewing the executive officer's other compensation to ensure that the executive officer's total compensation is in line with the Corporation's overall compensation philosophy.

Base salaries are reviewed annually and increased for merit reasons, based on the executive’s success in meeting or exceeding individual objectives and/or for market competitiveness. Additionally, base salaries can be adjusted as warranted throughout the year to reflect promotions or other changes in the scope or breadth of an executive’s role or responsibilities, as well as for market competitiveness.

Bonus Plans

The Corporation’s compensation program includes eligibility for annual incentive cash bonuses. The range of potential bonuses is currently determined at the Board’s sole discretion. NEO bonuses in the future may include corporate and financial performance targets, as well as personal performance objectives that are determined by the Compensation Committee and/or the Board, which may include the implementation of new strategic initiatives, the development of innovations, teambuilding, the ability to manage the costs of the business and other factors. The mix between corporate and financial performance targets and personal performance objectives and the resulting bonus entitlements vary for each NEO.

Omnibus Compensation Plan

On April 2024 the Board adopted the Omnibus Compensation Plan, which was subsequently approved by its shareholders on July 14, 2024.

The purpose of the Omnibus Compensation Plan is to (i) provide directors, officers, consultants and key employees of the Corporation with additional incentive; (ii) encourage stock ownership by such persons; (iii) encourage such persons to remain with the Corporation; and (iv) attract new directors, employees and officers, among other purposes. As a rolling stock option plan, the Omnibus Compensation Plan will require shareholder approval on an annual basis.

Summary of the Omnibus Compensation Plan

Pursuant to the Omnibus Compensation Plan, the Board may grant Awards to eligible persons as determined by the Omnibus Compensation Plan. The aggregate number of Common Shares which may be made available for issuance under the Omnibus Compensation Plan will not exceed with respect to the number of Common Shares issuable pursuant to all Awards, 10% of the total number of issued and outstanding Common Shares from time to time.

The purpose of the Omnibus Compensation Plan is to advance the interests of the Corporation and its subsidiaries by (i) promoting a significant alignment between directors, officers, employees and consultants of the Corporation and its subsidiaries (“Awardees”) and the growth objectives of the Corporation; (ii) associating a portion of Awardees’ compensation with the performance of the Corporation over the long term; and (iii) attracting, motivating and retaining the critical Awardees to drive the business success of the Corporation.

The following is a summary of the principal terms of the Omnibus Compensation Plan, which is qualified in its entirety by reference to the text of the Omnibus Compensation Plan:

The aggregate number of Common Shares issuable pursuant to all Awards shall not exceed 10% of the issued and outstanding Common Shares at the time of granting Awards (on a non-diluted basis).
Any increase in the issued and outstanding Common Shares will result in an increase in the available number of Common Shares issuable upon issuance of Awards granted under the Omnibus Compensation Plan, and any exercises of Options, or settlements of Awards other than Options, will make new grants of Options available under the Omnibus Compensation Plan, effectively resulting in a re-loading of the number of Options available to grant under the Omnibus Compensation Plan. If any Awards granted expire or terminate for any reason without having been exercised or settled in full, as applicable, the unissued shares subject thereto shall again be available for the purposes of the Omnibus Compensation Plan.
Subject to the provisions of the Omnibus Compensation Plan and rules of the CSE, the Board or its delegate shall have authority to interpret the Omnibus Compensation Plan and all Award agreements entered into in connection with the grant of Awards under the Omnibus Compensation Plan, to define the terms used in the Omnibus Compensation Plan and in all Award agreements entered into thereunder, to prescribe, amend and rescind the terms of the Omnibus Compensation Plan and to make all other determinations necessary or advisable for the administration of the Omnibus Compensation Plan.
The price per share at which any Common Share which is the subject of an Option may be purchased (the “Option Exercise Price”) will be established by the Board or its delegate, subject to the rules of the regulatory authorities having jurisdiction over the securities of the Corporation, provided that the Option Exercise Price shall not be less than the greater of the closing market prices of the underlying securities on (a) the trading day prior to the date of grant of the stock options, and (b) the date of grant of the stock options (all as more particularly described in the policies of the CSE). The term of each Option will be fixed by the Board or its delegate but may not exceed 10 years from the date of the grant.
Options granted pursuant to the Omnibus Compensation Plan shall be exercisable at such times and on the occurrence of such events, and be subject to such restrictions and conditions, as the Board or its delegate shall in each instance approve, which need not be the same for each grant or for each Awardee. Without limiting the foregoing, the Board or its delegate may permit the exercise of an Option through either a cashless exercise mechanism or net exercise mechanism pursuant to the terms of the Omnibus Compensation Plan and subject to the rules of the CSE.
Awards may be granted to Awardees as compensation for employment or consulting services or services as a director or officer and may entitle Awardees to receive, for no additional cash consideration, Common Shares upon specific time or other vesting conditions being met as determined by the Board or its delegate. The value of Awards is influenced by the fair market value of the underlying Common Shares, as determined by the Board or its delegate, pursuant to the terms of the Omnibus Compensation Plan.
If the expiry date, redemption date, or settlement date, as applicable, of any Award, would otherwise occur in a blackout period, the expiry date shall be extended to the tenth business day following the last day of the blackout period, where “blackout period” means a period of time during which the Corporation prohibits Awardees from exercising, redeeming or settling their Awards, due to applicable law or policies of the Corporation.

The maximum number of Common Shares which may be issued to any one Awardee, who is a Related Party (as such term is defined in the Omnibus Compensation Plan) may not exceed: (a) within any 12-month period under the Omnibus Compensation Plan is 5% of the number of Common Shares outstanding (on a fully-diluted basis) from time to time; and (b) at any time under the Omnibus Compensation Plan is 5% of the Common Shares outstanding on a fully-diluted basis from time to time, in each case unless shareholder approval is obtained pursuant to the Regulatory Rules (as such term is defined in the Omnibus Compensation Plan).
The maximum number of Common Shares which may be issuable to all Investor Relations Service Providers (as defined in the Omnibus Compensation Plan) within any 12-month period under the Omnibus Compensation Plan shall not exceed 2% of the number of Common Shares outstanding.
The maximum number of Common Shares which may be issuable to all Related Persons at any time under the Omnibus Compensation Plan shall not exceed (a) 5% of the Common Shares outstanding on a fully-diluted basis from time to time; and (b) within any 12 month period under the Omnibus Compensation Plan 5% of the number of outstanding Common Shares on a fully-diluted basis from time to time, in each case unless shareholder approval is obtained pursuant to the Regulatory Rules (as such term is defined in the Omnibus Compensation Plan).
No financial assistance or support agreement will be provided to any Awardee by the Corporation or any related entity of the Corporation to facilitate the purchase of Awards.
In the event of death, or disability, of an Awardee, unless otherwise determined by the Board or its delegate, (i) the executor or administrator of the Awardee's estate may exercise any vested Options for a period until the earlier of the original expiry date and 12 months after the date of death, and any unvested Options shall terminate and become void on the date of death; and (ii) any unvested RSUs previously credited to the Awardee's account will be cancelled, and vested RSUs will be paid to the Awardee's estate, with any settlement or redemption to occur within 12 months following the termination date.
Except as may otherwise be provided in an Awardee's employment agreement or as otherwise determined by the Board or its delegate, if an Awardee's employment or other relationship with the Corporation is terminated for any reason other than death or disability, (i) each vested Option held by that Awardee will cease to be exercisable on the earlier of the original expiry date and 90 days after the termination date; and (ii) any RSUs held by the Awardee that have vested before the termination date will remain with the Awardee. In all cases, any unvested Options or RSUs held by the Awardee shall terminate and become void on the date of termination.
Unless otherwise determined by the Board or its delegate, where an Awardee is terminated for cause, any unvested Options or RSUs held by the Awardee will be immediately cancelled and forfeited to the Corporation for no consideration.
In the event of a change of control (as defined in the Omnibus Compensation Plan), unless otherwise provided in the Omnibus Compensation Plan or an Award agreement, the Board or its delegate may deal with any or all outstanding Awards (or any portion thereof) in the manner it deems fair and reasonable in the circumstances of the change of control, including but not limited to cancelling all outstanding awards with or without payment or accelerating vesting and/or expiry of outstanding Awards and/or cause all Awards or portions thereof to become exchanged for stock awards of another corporation.

Unless restricted by law or CSE policies, the Board or its delegate may alter, amend, modify, suspend or terminate the Omnibus Compensation Plan or any Award in whole or in part without notice to, or approval from, Shareholders, including, but not limited to, for the purposes of:
making any amendments to the general vesting provisions of any Award;
making any amendments to the general term of any Award as permitted by the Omnibus Compensation Plan;
making any amendments to add covenants or obligations of the Corporation for the protection of Awardees;
making any amendments not inconsistent with the Omnibus Compensation Plan as may be necessary or desirable with respect to matters or questions which, in the good faith opinion of the Board, it may be expedient to make, including amendments that are desirable as a result of changes in law or as a “housekeeping” matter; or
making such changes or corrections which are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error.
Shareholder approval is required to make the following amendments to the Omnibus Compensation Plan:
a reduction in the Option Exercise Price of a previously granted Option benefitting a Related Person or one of his/her/its Affiliates;
any amendment or modification which would increase the total number of Common Shares available for issuance under the Omnibus Compensation Plan; or
an increase to the limit on the number of Common Shares issued or issuable under the Omnibus Compensation Plan to Insiders of the Corporation.

Options granted under the Omnibus Compensation Plan will have an exercise price of not less than the closing price of the Corporation’s shares on the CSE on the day prior to the date of the grant, subject to any discount that may be applied pursuant to the policies of the CSE or the stock exchange the Common Shares are then listed on.

Compensation of Named Executive Officers and Directors

The following table sets forth compensation for each NEO of the Corporation and each director of the Corporation for the fiscal years ended December 31, 2023 and December 31, 2022. The Corporation currently does not have a standard arrangement pursuant to which directors are compensated. All directors are reimbursed for their respective out of pocket expenses in relation to their attendance at board of director meetings and committee meetings.

Types of Compensation Excluding Compensation Securities
Name and Principal Position	Year	Salary, Consulting Fee, Retainer or Commission	Bonus	Committee or Meeting Fees	Value of Perquisites	Value of All Other Compensation	Total Compensation
		($)	($)	($)	($)	($)	($)
Ben Tsur Joseph(1)CEO and Chairperson	2023	14,388	-	-	-	-	14,388
	2022	162,866	-	-	-	-	162,866
Alan Rootenberg(1)CFO and Director	2023	24,000	-	-	-	-	24,000
	2022	16,000	-	-	-	-	16,000

Notes:
(1) Mr. Joseph and Mr. Rootenberg do not receive any compensation for their director positions.

Stock Options and Other Compensation Securities

There were no options granted during the years ended December 31, 2022 and 2023.

Employee Agreements and Termination and Change of Control Benefits

Each of the NEOs provides his services through his management company. As Chief Executive Officer, Ben Tsur Joseph will be providing his services through his management company, Mida Consulting and Investments Ltd (“Mida”). As Chief Financial Officer, Alan Rootenberg will be providing his services through his management company, The M&S Group Inc. (“M&S”).

Set out below is a summary of the consulting agreements which the Corporation proposes to enter into concurrent with the completion of the Transaction.

Mida Consulting Agreement

Shelfie entered into a consulting agreement with Mida, effective February 1, 2022 (the “Mida Consulting Agreement”), pursuant to which Mida is to be paid US$13,500 per month plus applicable taxes, which will increase to US$27,000 per month plus applicable taxes upon Shelfie becoming a publicly listed company. On February 1, 2023, the Company and the CEO verbally agreed to terminate the Mida Consulting Agreement. A new agreement was signed on January 1, 2024 in respect of the $5,000 per month compensation (the “New Agreement”). On June 3, 2024 an amendment to the New Agreement was signed pursuant to which the CEO, by way of Mida, will not be paid any compensation until such time as Shelfie is a publicly listed company and has raised an additional US$1,000,000 post such listing.

M&S Consulting Agreement

Shelfie entered into a consulting agreement with Alan Rootenberg, and dated effective April 1, 2022 (the “M&S Consulting Agreement”), pursuant to which M&S is to be paid US$2,000 per month plus applicable taxes, which will increase to US$3,000 per month plus applicable taxes upon Shelfie becoming a publicly listed company.

Other Compensation

The Corporation intends to propose paying the Corporation’s External Directors, in accordance with the Remuneration Regulations. We intend to pay the fixed amount prescribed under the Remuneration Regulations for a company of the Corporation’s size. The Corporation may also consider in the future granting equity compensation to the Corporation’s External Directors, subject to the provisions of the Remuneration Regulations. The amounts prescribed under the Remuneration Regulations are updated according to rate of increase of the Israeli Consumer Price Index and are currently as follows:

Annual retainer: NIS 31,000 - ~US $8,200 (@ NIS 3.78: US $1.00)
Per meeting fees: NIS 1,000 - ~$265 (meeting fees relate both to board meetings and, additionally, to each committee meeting); provided that meetings held by teleconference will be 60% of the above and if signing resolutions in writing without convening an actual meeting will be 50% of the above.

The Corporation also intends to reimburse External Directors for international travel expenses.

Indemnification, Exculpation and Insurance

The Corporation intends to maintain director and officer liability insurance and will enter into indemnification agreements with each of its directors and officers. The indemnification agreements will require that the Corporation indemnify and hold the indemnitees harmless to the greatest extent permitted by law for liabilities arising out of the indemnitees’ service to the Corporation as directors and officers, provided that the indemnitees acted honestly and in good faith and in a manner the indemnitees reasonably believed to be in or not opposed to the Company’s best interests and, with respect to criminal and administrative actions or proceedings that are enforced by monetary penalty, the indemnitees had no reasonable grounds to believe that his or her conduct was unlawful. The indemnification agreements will also provide for the advancement of defence expenses to the indemnitees by the Corporation. We also intend to enter into agreements with each of the Corporation’s directors and officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care.

AUDIT COMMITTEE

Audit Committee Charter, Composition and Relevant Education and Experience

The Audit Committee is governed by its charter that is attached as Schedule “D” to this Prospectus.

National Instrument 52-110 - Audit Committees (“NI 52-110”) requires the Corporation, as a venture issuer, to disclose annually certain information concerning the constitution of its audit committee (the “Audit Committee”) and its relationship with its independent auditor, as set forth in the following.

Composition of the Audit Committee

The Audit Committee shall, subject to applicable exemptions available under NI 52-110, be comprised of at least three directors, each of whom shall be an independent director of the Corporation. All External Directors under Israeli law will serve as members of the Audit Committee.

Subject to an applicable exemption available under NI 52-110, all members of the Audit Committee must, to the satisfaction of the Board of Directors, be “financially literate” within the meaning of NI 52-110 and at least one of whom also qualify as having “accounting and financial expertise” under the Israeli Companies Law.

A director with “accounting and financial expertise” (under the Israeli Companies Law) is a director whose education, experience and skills qualify him or her to be highly proficient in understanding business and accounting matters and to thoroughly understand the company’s financial statements and to stimulate discussion regarding the manner in which financial data are presented.

Despite the aforesaid, in accordance with the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, the position of a director who is classified as having an accounting and financial expertise may be held by an "independent director" (under foreign law) which serves as a member of the audit committee, and not necessarily by an External Director. In such event, all external directors of such a company shall be directors with at least professional competence. Each member will have, to the satisfaction of the Board, sufficient skills and/or experience as are relevant and will be of contribution to the carrying out of the mandate of the Committee.

With respect to additional limitations imposed on members of the Audit Committee and other provisions applying to the Audit Committee under the Israeli Companies Law, see “Noteworthy Features of Israeli Corporate Law”, “Audit Committee”.

The following are the members of the Audit Committee of the Corporation:

Yehudit Halpern, Chair	Independent^{(1)} and designated to be appointed as an External Director	Financially literate^{(1)}
Lilach Lotan	Independent^{(1)}	Financially literate^{(1)}
Haim Alkoby	Independent^{(1)} and designated to be appointed as an External Director	Financially literate^{(1)}

Note:

(1) As defined by NI 52-110.

Relevant Education and Experience

For the purposes of NI 52-110, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the issuer's financial statements. All members of the Audit Committee have experience reviewing financial statements and dealing with related accounting and auditing issues. The education and experience of each member of the Audit Committee relevant to the performance of his duties as a member of the Audit Committee can be found under the heading "Management – Biographies".

Reliance on Certain Exemptions

At no time has the Corporation relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.

Exemption for Venture Issuers

The Corporation is a "venture issuer" as defined in NI 52-110 and is relying on Part 5 (Reporting Obligations) of NI 52-110.

Pre-Approval Policies and Procedures

Under the Charter of the Audit Committee, the Audit Committee has authority to engage and communicate with advisors and professionals for non-audit services as it deems appropriate.

External Auditors Service Fees

The aggregate fees billed by the Corporation's external auditors for the financial years ended December 31, 2022 and 2023 or audit fees are as follows:

	Year Ended December 31, 2022	Year Ended December 31, 2023
Audit Fees(1)	$15,000	$17,000
Audit-Related Fees(2)	-	-
Tax Fees(3)	$1,000	$1,000
All Other Fees(4)	-	-

Notes:

(1) Audit fees consist of fees for the audit of our annual financial statements or services that are normally provided in connection with statutory and regulatory filings or engagements.

(2) Audit-related fees are fees for assurance and related services related to the performance of the audit or review of the annual financial statements that are not reported under "Audit Fees". These include due diligence for business

acquisitions, audit and accounting consultations regarding business acquisitions, and other attest services not required by statute.

(3) Tax fees, tax planning, tax advice and various taxation matters.
(4) All other fees include the aggregate fees billed for products and services provided by the Corporation’s external auditor, other than “Audit fees”, “Audit-related fees” and “Tax fees” above.

Disclosure and Insider Trading Policy

The Corporation’s disclosure and insider trading policy (the “Disclosure and Insider Trading Policy”), which will apply to board members, officers, employees and contractors of the Company, establishes procedures relating to the disclosure of material information. It establishes guidelines for dealing with forward-looking information and for ensuring compliance with the Company’s policy of prohibition on selective disclosure. The Disclosure and Insider Trading Policy provides standards for electronic communications and the use of the Corporation’s website to publish information.

Additionally, the Disclosure and Insider Trading Policy formalizes the Corporation’s policy on trading in Company securities. Pursuant to the Disclosure and Insider Trading Policy, material non-public information may not be disclosed except in the “necessary course of business” and if disclosure is in the necessary course of business, the person receiving such information may be required to enter into a confidentiality agreement. The Disclosure and Insider Trading Policy will prohibit all trades by a person “in a special relationship with the Company” when in possession of material non-public information until such information is generally disclosed for a minimum period of time. The Disclosure and Insider Trading Policy will also impose restrictions on trading during prescribed blackout periods and no trade periods implemented at the end of each quarter.

The Disclosure and Insider Trading Policy will be administered by the Corporate Governance and Nominating Committee. A copy of the Disclosure and Trading policy is attached to this prospectus as Schedule “E”.

CORPORATE GOVERNANCE

National Policy 58-201 – Corporate Governance Guidelines (“NP 58-201”) establishes corporate governance guidelines which apply to all public companies. The Corporation has reviewed its own corporate governance practices in light of these guidelines. National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) mandates disclosure of corporate governance practices which disclosure is set out below.

Board of Directors

The Board of Directors consists of 6 persons, 4 of whom the Corporation believes to be independent based upon the tests for independence set forth in NI 52-110, being Yehudit Halpern, Haim Alkoby, Zaler Mordchai Salom and Lilach Lotan including two of whom, being Mr. Haim Alkoby and Ms. Yehudit Halpern, which have been nominated by the Corporation’s Board of Directors to serve as External Directors, under the Israeli Companies Law, subject to obtaining required shareholders’ approval following completion of this listing under this prospectus (See “Noteworthy Features of Israeli Corporate Law – External Directors” for a description of the requirements under the Israeli Companies Law for a director to serve as an External Director). The other two directors, Ben Tsur

Joseph, and Alan Rootenberg, are not independent directors as they also serve as officers of the Corporation.

NP 58-201 suggests that the board of directors of reporting issuers should be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with the relevant company. A material relationship is a relationship that could, in the view of the board of directors, reasonably interfere with the exercise of a director’s independent judgment. In addition, the independent judgment of the board in carrying out its responsibilities is the responsibility of all directors. The Corporation has established a Governance and Nominating Committee comprised of three directors, two of whom are independent in accordance with NI 52-110.

The Board of Directors facilitates independent supervision of management through meetings of the Board and through frequent informal discussions among independent members of the Board and Management. In addition, the Board has access to the Corporation’s external auditors, legal counsel and to any of the Corporation’s officers.

In addition to the roles of the Board of Directors under the Israeli Companies Law, the board of directors have a stewardship responsibility to supervise the management of and oversee the conduct of the business of the relevant company, provide leadership and direction to management, evaluate management, set policies appropriate for the business of the company and approve corporate strategies and goals.

The day-to-day management of the business and affairs of the Corporation is granted to the CEO. The Board will give direction and guidance through the CEO to management and will keep Management informed of its evaluation of the senior officers in achieving and complying with goals and policies established by the Board.

The Board exercises its independent supervision over Management by its policies that (a) periodic meetings of the Board be held to obtain an update on significant corporate activities and plans; and (b) all material transactions of the Corporation are subject to prior approval of the Board. To facilitate open and candid discussion among its independent directors, such directors are encouraged to communicate with each other directly to discuss ongoing issues pertaining to the Corporation.

The Board of Directors is entitled to engage outside advisers, at the Corporation’s expense, where, in the view of the Board of Directors, additional expertise or advice is required.

Participation of Directors in Other Reporting Issuers

Other than as set out below, none of the directors of the Corporation are currently serving as directors or officers of other reporting issuers.

Name	Name and Jurisdiction of Reporting Issuer	Name of Trading Market	Position(s) Held	Term
Ben Tsur Joseph	A2Z Cust2Mate Solutions Corp.	TSXV and Nasdaq	Director/Chief Executive Officer	1998 – present

Name	Name and Jurisdiction of Reporting Issuer	Name of Trading Market	Position(s) Held	Term
Alan Rootenberg	Clearmind Medicine Inc.	CSE	Director/CFO	Director: December 2019 – present CFO: June 2022 – present
	Solvbl Solutions Inc.	CSE	Director	March 2021 – present
	Empower Clinics Inc.	CSE	CFO	August 2013 – May 2018
	Eco (Atlantic) Oil & Gas Ltd.	TSXV	CFO	November 2011 – present
	BioHarvest Sciences Inc.	CSE	CFO	November 2018 – present
	A2Z Cust2Mate Solutions Corp.	TSXV and Nasdaq	Director	May 2020 – present

Orientation and Continuing Education

While the Corporation does not have formal orientation and training programs, orientation of new members of the Board is conducted by informal meetings with members of the Board, briefings by Management, and the provision of copies of or access to the Corporation's documents.

The Corporation has not adopted formal policies respecting continuing education for Board members. Board members are encouraged to communicate with management, legal counsel, auditors and consultants, to keep themselves current with industry trends and developments and changes in legislation with management's assistance, and to attend related industry seminars and visit the Corporation's operations. Board members have full access to the Corporation's records.

Artificial Intelligence

The Board of Directors does not presently have a written mandate that explicitly acknowledges its responsibilities for the identification of AI related risks (the "AI Policy"). Shelfie is aware that as the Corporation's business progresses from prototype to commercialization that it will be required to adapt policies and procedures in a way that accounts for the unique features of its AI systems. Shelfie expects to adopt an AI Policy once the data from the completion of the Israeli Pilot is analyzed at which point Shelfie and its relevant AI professionals will have a better understanding of the relevant scope of the AI Policy to Shelfie's AI risk exposure. The AI policy will continue to develop and be amended, if required, once Shelfie analyses further data received from the expected commercial deployment during Phase 3 (See "Business Objectives, Strategy and Milestones -Research and Development"). Shelfie expects that such policies will implement, and operationalize an end-to-end AI governance and operating model, including strategy, building, training, evaluating deploying, operating and monitoring AI. Furthermore, it expects policies are expected to address some of the following:

(1) considering AI system planning, design, verification, and validation, including being satisfied that the AI system is fit for purpose and that robust testing prior to deployment has taken place;

(2) having a “human-in-the-loop”, where humans can effectively monitor the input and/or output of an AI system, as appropriate, prior to that input or output being used for its intended purpose;

(3) adequate AI literacy of those using the outputs of AI systems to ensure that the users of a given output are using it for its intended purpose;

(4) adequate measures to mitigate the technological and operational risks related to the use of AI systems (e.g. initial and ongoing monitoring of cybersecurity risks, AI system bias and model drift);

(5) the importance of data in the functioning of AI systems, including ensuring that data be accurate and complete, not include prohibited information and account for privacy considerations; and

(6) an examination of the full supply chain of an AI system throughout its lifecycle, including third-party service providers, the cloud services and data sources used.

Shelfie expects that by adequately addressing the above prior to commercialization that it will:

(1) create an internal forum for discussion and collaboration of committee members and provide a framework for meaningful communication with management;

(2) commit to workforce training in an environment that fosters innovation, flexibility, and trust while identifying the unique risks associated with AI;

Ethical Business Conduct

The Board has found that the fiduciary duties placed on individual directors by governing corporate legislation, and the restrictions placed by the Israeli Companies Law on an individual director’s participation in decisions of the board in which the director has an interest, have helped to ensure that the Board of Directors operates independently of Management and in the best interests of the Corporation.

Under corporate legislation, a director is required to act honestly and in good faith with a view to the best interests of a company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. In addition, if a director of a company also serves as a director or officer of another company engaged in similar business activities to the first company, that director must comply with the relevant provisions of the Israeli Companies Law, as well as the relevant securities regulatory instruments, in order to ensure that directors exercise independent judgment in considering transactions and agreements in respect of which a director or officer has a material interest. Subject to the provisions of the Israeli Companies Law, any interested director would be required to declare the nature and extent of his interest and would not be entitled to vote at meetings of directors that evoke such a conflict.

In addition, the Board has adopted a code of business conduct and ethics (the “Code of Ethics”) which will be effective as of listing on the CSE, which outlines a set of ethical standards by which each

director, officer, employee, consultant and contractor of the Corporation should conduct his or her business. A copy of the Code of Ethics is attached to this prospectus as Schedule “F”.

Board of Directors Committees

The Corporation’s Board of Directors ensures that the composition of its committees shall meet applicable statutory independence requirements as well as any other applicable legal and regulatory requirements. Set out below are descriptions of the Corporation’s current committees (other than the Audit Committee).

Nomination of Directors

The Corporation has established Governance and Nominating Committee consisting of three directors, the majority of which have been determined by the Corporation’s Board to be independent within the meaning of NI 52 -110, which is responsible for reviewing, overseeing, and evaluating the Corporation’s corporate and nominating policies. The Corporation’s Corporate Governance and Nominating Committee is currently comprised of Mr. Ben Tsur Joseph, Mr. Zaler Mordchai Salom Iosf and Ms. Yehudit Halpern.

The Governance and Nominating Committee’s Purpose is to assist the Board in:

Developing corporate governance guidelines and principles and providing governance leadership;
Identifying and recommending individuals qualified to be nominated as members of the Board;
Reviewing the size and composition of the Board committees; and
Evaluating the performance and effectiveness of the Board and Board committees.

Compensation Committee

The Corporation has established the Compensation Committee consisting of three directors, consisting of all of the External Directors, and the majority of which have been determined by the Corporation’s Board to be independent within the meaning of NI 52 -110, which is responsible for reviewing, overseeing, and evaluating the Corporation’s corporate and nominating policies. The Corporation’s Compensation Committee is currently comprised of Ms. Lilach Lotan, Mr. Haim Alkoby and Ms. Yehudit Halpern. See also “Noteworthy Features of Israeli Corporate Law – Compensation Committee”.

Assessments

The Board monitors the adequacy of information given to directors, communication between the Board and management and the strategic direction and processes of the Board and committees. On an ongoing annual basis, the Board assesses the performance of the Board as a whole, each of the individual directors and each committee of the Board in order to satisfy itself that each is functioning effectively.

INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS

None of the Corporation’s directors or officers or any of their respective associates is indebted to the Corporation or has been subject of a guarantee, support agreement, letter of credit or similar arrangement or understanding provided by the Corporation.

SHAREHOLDER RIGHTS, DIRECTORS’ OBLIGATIONS A COMPARATIVE LAW SUMMARY

Set out below is a summary of some of the shareholder rights and remedies found under Canadian (Ontario) and Israeli Companies Law, respectively. The following summary is not an exhaustive statement of all relevant laws, rules and regulations and is intended as a general guide only and should not be construed as legal advice. Investors should consult with their own legal adviser if they require further information.

Comparison of Corporate Laws

| Matter | Israeli Law | Ontario (“ON”) Law
ON Business Corporations Act (“OBCA”) |
| --- | --- | --- |
| Incorporation | The existence of a company commences on the incorporation date specified on the certificate of incorporation.
(Companies Law (1999), §5) | A company comes into existence on the date set out in the certificate of incorporation.
(OBCA S. 7) |
| Corporate management | The board of directors of the company will outline the company’s policies and supervise the performance of the CEO’s roles and actions. The board of directors may establish committees and delegate authorities thereto, in accordance with the terms and limitations provided in the Israeli Companies Law.
(Companies Law (1999), §92-93) | Subject to the OBCA, the regulations, the notice of articles, articles of the company, and any unanimous shareholder agreement of the company, the directors shall manage, or supervise the management of, the business and affairs of the company.
(OBCA S. 115(1)) |
| External directors | At least two External Directors (as defined in the Israeli Companies Law) must be appointed for a public company, with at least one of them being a director with accounting and financial expertise and the others having professional qualifications. External Directors must meet certain standards of independence and non-affiliation with the company or its controlling shareholder at the time of their appointment and during the two-year period prior to their appointment. Each External Director is appointed for a term of three years, which may be extended for two additional terms of three years each, in accordance with the provisions of the Israeli Companies Law. | A company must have at least one director and a public company must have at least three directors. At least one-third of the directors of an offering corporation shall not be officers of employees of the corporation or any of its affiliates.
(OBCA S. 115(2) and (3)) |

| Matter | Israeli Law | Ontario (“ON”) Law
ON Business Corporations Act (“OBCA”) |
| --- | --- | --- |
| | (Companies Law (1999), §239-249)
Despite the aforesaid, in accordance with the Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000, the position of a director who is classified as having an accounting and financial expertise may be held by an "Independent Director" (under foreign law) which serves as a member of the audit committee, and not necessarily by an External Director. In such event, all external directors of such a company shall be directors with at least professional competence. | |
| Internal auditor | The board of directors of a public company will appoint an internal auditor at the proposal of the audit committee. The role of the internal auditor is to examine, among other things, whether the company’s actions comply with Israeli law and orderly business procedures. The internal auditor must not be an “interested party” or an office holder, or a relative of an interested party or officer, or a member of the company’s external auditors.

(Companies Law (1999), §146-153) | A public company is required to have an auditor appointed by the shareholders at each annual meeting.

(OBCA S. 149(1) and (2)) |
| Audit Committee | The board of directors of a public company will appoint, from its members, an audit committee, with no less than three members. All of the external directors will be members thereof and the majority of its members will be independent directors (as defined under the Israeli Companies Law). The members of the audit committee will not include, among others, the controlling shareholder or a relative thereof, the chairman of the board of directors or any director employed by the company or a controlling shareholder thereof or a corporation controlled by the controlling shareholder, or providing services to the company on a regular basis. The roles of the audit committee include, inter alia, to identify deficiencies in the administration of the company (including by consulting with the internal auditor or the external auditors of the Company), and recommend to the board of directors remedial actions with respect thereto; to make certain determinations with respect to related party transactions; to review and approve or disapprove certain related-party transactions; to examine the activities and to assess | A public company must have an audit committee composed of not less than three directors of the company, a majority of whom are not officers or employees of the company or any of its affiliates. The audit committee will review the financial statements of the company and report thereon to the board of directors of the company before such financial statements are approved.

(OBCA S. 158(1) and (2)) |

| Matter | Israeli Law | Ontario (“ON”) Law
ON Business Corporations Act (“OBCA”) |
| --- | --- | --- |
| | the performance of the internal auditor as well as to review the internal auditor’s work plan, etc.
(Companies Law (1999), §114-118) | |
| Distribution of dividends | Distributions (including dividend distributions) may be paid out of a company’s profits, provided that there is no reasonable concern that the distribution will prevent the company from satisfying its existing and foreseeable obligations as they become due. Pursuant to the Israeli Companies Law, the distribution amount is limited to the greater of retained earnings or earnings accumulated over the previous two years, according to the Company’s then last reviewed or audited financial statements, provided that the date of the financial statements is not earlier by more than six months prior to the date of the distribution.

The court may, on the application of a company, allow it to effect a distribution in respect of which the profit criterion is not fulfilled, provided that the court is convinced that there is no reasonable concern that such distribution might prevent the company from being able to pay its existing and anticipated debts when the time comes for such payment.

In the event that the company performs a prohibited distribution, then a shareholder shall return the amounts received to the company, unless the shareholder did not and ought not to have known that the distribution effected was prohibited.

There is a presumption according to the Israeli Companies Law that a shareholder in a public company who is not also a director, general manager or controlling shareholder at the time of the distribution, did not know and ought not to have known that the distribution effected was prohibited.

(Companies Law (1999), §301-311) | Subject to its articles and any unanimous shareholder agreement, a company may pay a dividend, but it cannot pay said dividend if there are reasonable grounds for believing that: the company is, or would after the payment be, unable to pay its liabilities as they become due; or the realizable value of the company’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

(OBCA S. 38(1), (2) and (3)) |
| Share repurchase | The repurchase of shares is only permitted subject to conditions regarding “permitted distribution” (as set forth above), and the shares held by the company itself will not confer any rights, as long as owned by the company. | Subject to any restriction in its notice of articles and articles, a company may purchase or otherwise acquire shares issued by it unless there are reasonable grounds for believing that: the company is, or would after the payment be, unable to pay its liabilities as they become due; or the |

Matter	Israeli Law	Ontario (“ON”) Law ON Business Corporations Act (“OBCA”)
	(Companies Law (1999), §302-305)
Foreign-traded Israeli company may purchase its own shares even if it does not have the sufficient reserves required under the Israeli Companies Law for distribution, without seeking the court's permission, provided that: (a) the board of directors is if the opinion that the company is able to meet its outstanding financial obligations; (b) the company informs the public and its secured and/or material creditors of its plan to purchase its shares at least 30 days in advance; and (c) if any creditor informs the company that it opposes such buy-back the company will be required to turn to the court and seek its permission.
(Companies Regulations (Relief for Public Companies Traded on Stock Exchanges Outside of Israel) of 2000), §7c)	realizable value of the company’s assets would after the payment be less than the aggregate of its liabilities and stated capital of all classes.
(OBCA S. 30(1) and (2))^{37}
Transactions with related parties and conflicts of interest	The Israeli Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that he or she may be aware of and all related material information or documents concerning any existing or proposed transaction with the company. An interested office holder’s disclosure must be made promptly and in any event no later than the first meeting of the board of directors at which the transaction is considered.

Certain transactions with officers and interested parties require special approval processes, inter alia, in accordance with the classification of the transaction (extraordinary/ordinary transaction) or terms of office/employment, and the identity of the party with the personal interest (officer/director/controlling shareholder). Certain transactions require the approval of the audit committee/compensation committee, board of directors, and general meeting of shareholders (with a simple majority or with a special majority that includes a majority of shareholders who do not | A director or an officer of a company shall disclose to the company the nature and extent of any interest that he or she has in a material contract or material transaction, whether made or proposed, with the company.
(OBCA S. 132)

Furthermore, a director who is required to disclose their interest shall not attend any part of a meeting of directors during which the contract or transaction is discussed and shall not vote on any resolution to approve the contract or transaction unless the contract or transaction: relates primarily to his or her remuneration as a director, officer, employee, agent or mandatory of the company or an affiliate; is for indemnity or insurance; or is with an affiliate.
(OBCA S. 132(5))^{38} |

37 An offer by the company to acquire or redeem securities of the company held by a person or company in ON may be subject to formal issuer bid requirements outlined in the Securities Act (ON).

38 Reporting issuers in ON are subject to additional requirements regarding transactions with “related parties” as set forth in MI 61-101.

Matter	Israeli Law	Ontario (“ON”) Law ON Business Corporations Act (“OBCA”)
	have a personal interest in the approval of the transaction). In addition, certain limitations apply to the activities of officers who have conflicts of interest, arising from the duty of loyalty applicable to the officer of the company, and special approval processes have been determined for certain actions of officers who have conflicts of interest. (Companies Law (1999), §268-276)
Chairman of the Board of Directors and CEO	Excluding the first three months after the Company becomes a public company, none of the CEO, a relative thereof or a person subject to the CEO (directly or indirectly) shall serve as the chairman of the board of directors and the chairman or a relative of the chairman may not be vested with authorities of the chief executive officer, unless the approval of the general meeting of shareholders is obtained, with a majority of the shareholders who are not among the controlling shareholders of the company and who do not have a personal interest in such approval, and for periods of up to three years each. (Companies Law (1999), §94-95, 121) Despite the aforesaid, the validity of a decision of the general meeting of the shareholders made by a company after it first offered its securities to the public, or which the company described in the prospectus or in the public offering document, shall be for a period not exceeding five years from the date on which the company became a public company. (Companies Regulations (Period of Validity of a Decision under Section 121 of the Law), 2016, §1)	The OBCA does not include similar provisions.
Exemption, indemnification and insurance for directors and other officers	The Israeli Companies Law sets out provisions regarding the exemption, indemnification and insurance of directors and other officers. A company is not permitted to exempt an officer from liability due to a breach of the duty of loyalty towards it, and is not permitted to exempt an officer in advance from liability towards it following a breach of the duty of care in a distribution. A company may insure the liability of an officer thereof or indemnify him or her in accordance with the provisions of the Israeli Companies Law. Regarding an advance indemnification undertaking	A company may indemnify a director or officer of the company, a former director or officer of the company or another individual who acts or acted at the company’s request as a director or officer, or an individual acting in a similar capacity, of another entity from liability in certain situations. (OBCA S. 136(1)) A company may not indemnify such an individual unless the individual: acted honestly and in good faith with a view to the best interests of the company, or, as the case may be, to the best

| Matter | Israeli Law | Ontario (“ON”) Law
ON Business Corporations Act (“OBCA”) |
| --- | --- | --- |
| | (with respect to a financial obligation imposed on the officer in favor of another person under a court judgment), it is limited to events which, in the opinion of the board of directors, are expected in light of the company’s actual activities when providing the undertaking and to an amount or according to criteria that the board of directors deems reasonable under the circumstances.

A company may neither exempt from liability nor indemnify an officer or enter into an insurance contract, against any of the following: (i) a breach by the officer of his or her duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company, to the extent that the officer acted in good faith and had reasonable basis to assume that the act would not prejudice the interests of the company; (ii) a breach by the officer of his or her duty of care if the breach was intentional or reckless, excluding a breach arising out of the negligent conduct only of the officer; (iii) any act or omission with the intent to derive an unlawful personal benefit; or (iv) a fine, monetary sanction or forfeit levied against the officer.

(Companies Law (1999), §258-264) | interests of the other entity for which the individual acted as director or officer or in a similar capacity at the company’s request; and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.

(OBCA S. 136(3))

A company may purchase and maintain insurance against any liability incurred by such individuals: in the individual’s capacity as a director or officer of the company; or in the individual’s capacity as a director or officer, or similar capacity, of another entity, if the individual acts or acted in that capacity at the company’s request.

(OBCA S. 136(4.3)) |
| Duty of loyalty and care of the officers | An officer owes a duty of care and a fiduciary duty to the company, as provided in the Israeli Companies Law.

An officer owes a fiduciary duty to the company, and must act in good faith and in the best interests of the company, including by refraining from any conflict of interest between the performance of his or her duties in the company and the performance of his or her other duties or his or her personal affairs; refraining from any activity that is competitive with the company’s business; and refraining from taking advantage of any business opportunity of the company in order to obtain a personal gain for himself or herself or others.

An officer will act with the skill that a reasonable officer would act with, in the same position and under the same circumstances.

(Companies Law (1999), §252-257) | Directors and officers owe a duty of loyalty and care to the company. Every director and officer of a company in exercising their powers and discharging their duties shall: act honestly and in good faith with a view to the best interests of the company; and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(OBCA S. 134(1)(a) and (b)) |
| Rights and obligations of shareholders | The rights and obligations of shareholders are as provided in the Israeli Companies Law, in the articles of association of the company and under | Registered holders of shares, beneficial owners of shares and creditors of a company, their agents and legal representatives may examine certain |

Matter	Israeli Law	Ontario (“ON”) Law ON Business Corporations Act (“OBCA”)
	any law, including, inter alia, the right to participate and vote in the general meetings, the right to receive dividends, review certain corporate documents and receive the articles of association and financial statements of the company. A shareholder is subject to the obligation to act in good faith and in a customary manner towards the company and the other shareholders, and to refrain from abusing his or its power in the company. In addition, certain shareholders have a duty of fairness towards the company. These shareholders include any controlling shareholder, any shareholder who knows that he or it possesses the power to determine the outcome of a shareholder vote in a general meeting and any shareholder who, according to the articles of association, has the power to appoint, or to prevent the appointment of, an officer, or other power towards the company.

Shareholders are permitted to enter into voting agreements amongst themselves, subject to the duties imposed upon them according to the Israeli Companies Law.

(Companies Law (1999), §183-193) | corporate records during the usual business hours of the company, and may take extracts from those records.

(OBCA S. 145(1))

Subject to the voting rights prescribed in the regulations, bylaws and any shareholder agreement, shareholders have the right to vote on certain corporate actions, including ones which result in the sale of all or substantially all of its undertaking.^{39}

(OBCA S. 168)

Subject to the notice of articles and articles, shareholders have the right to dissent from corporate acts involving certain amendments to the articles, the continuance of the company out of the jurisdiction, statutory amalgamations, carrying out a going-private or squeeze-out transaction, or a sale, lease or exchange by the company of all or substantially all of its assets. If the action approved by the resolution from which the shareholder dissents or certain other orders become effective, a shareholder is entitled to be paid by the company the fair value of the shares in respect of which the shareholder dissents.

(OBCA S. 185) |
| Amendment of articles | The company may amend its articles of association by a resolution adopted by holders of a simple majority of shares voting in the general meeting of the Company, unless the articles of association determine that another majority is required. A change in the articles of association which obligates a shareholder to purchase additional shares or increase the scope of his or its liability shall not obligate the shareholder without his or its consent thereto. An amendment to the articles of association, excluding certain changes that require registration with the Israeli Registrar of Companies (e.g. - change of name of company; change of purposes of a company; etc.) shall be valid as of the date of the resolution or such later date determined in the company’s resolution. | Unless otherwise specified in the notice of articles or articles of the company, the notice of articles of a company may be amended by special resolution of the shareholders.

(OBCA S. 168(1) and (5))

Unless otherwise specified in the notice of articles or articles of the company, the articles of a company may be amended by special resolution of the shareholders.

(OBCA S. 168(1) and (5)) |

39 Relevant securities legislation and securities exchanges impose additional requirements.

Matter	Israeli Law	Ontario (“ON”) Law ON Business Corporations Act (“OBCA”)
	(Companies Law (1999), §20-22)
Forced sale of shares (Full Tender Offer)	According to the Israeli Companies Law, a person wishing to acquire shares of a public company and who would as a result of such acquisition hold over 90% of the target company’s voting rights or the target company’s issued and outstanding share capital, is required by the Israeli Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. If (a) the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company and the shareholders who accept the offer constitute a majority of the offerees that do not have a personal interest in the acceptance of the tender offer or (b) the shareholders who did not accept the tender offer hold less than 2% of the issued and outstanding share capital of the company, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law.

The court may, at the request of any person who was an offeree in the full tender offer accepted, determine that the consideration for the shares was less than the fair value thereof, and that the fair value should be paid, as determined by the court.

(Companies Law (1999), §336-342) | If within 120 days after the date of a take-over bid the bid is accepted by the holders of not less than 90% of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror is entitled, on complying with the provisions of the OBCA, to acquire the shares held by the dissenting offerees under the same conditions that the offeror purchased the shares of the offerees

accepting the takeover bid, unless the dissenting offeree elects to demand payment of the fair value of his, her or its shares within 20 days after receipt of the offeror’s notice, in which case the offeror may apply to the court to fix the fair value of the shares.

(OBCA S. 188)^{40} |
| Class actions and derivative actions | The Israeli Class Action Law, 5766-2006, provides the possibility of submitting a class action on behalf of a group, whereby each of the persons listed in the class action has a cause of action arising from the same connection (as defined in Section 5 of the Second Addendum of the Class Action Law above) to the security.

In addition, the Israeli Companies Law provides the ability to submit a derivative action on behalf of the company, upon the satisfaction of certain conditions, including the approval of the court. | Where numerous shareholders may be liable, the court may permit an action be brought against one or more shareholders of a company as representatives of the class and may make an order of reference and add as parties all such shareholders as may be found.

(OBCA S. 34(7))

Shareholders can sue under the oppression remedy or through a derivative action.

(OBCA S. 248 and 246 (1))^{41} |

40 Going-private transactions are regulated by both provincial securities legislation and the rules of the relevant securities exchange.

41 Shareholders can also sue as a class pursuant to the Class Proceedings Act (ON) if certain requirements are met.

Matter	Israeli Law	Ontario (“ON”) Law ON Business Corporations Act (“OBCA”)
	(Class Actions Law (2006), §3(a), Addendum 2, §1-14) (Companies Law (1999), §194-206)
Grounds for liquidation of a company	The process of liquidation of a company in Israel are as specified in the Israeli Companies Law and the Israeli Insolvency and Economic Rehabilitation Law, 2018 (the “Israeli Insolvency Law”). According to the Israeli Companies Law, a winding-up of a company may be instigated voluntarily by the company (via the board submitting a solvency statement and a general meeting appointing a trustee) or by the court. The court may wind-up a company upon, inter alia, one of the following occurrences: (i) the company adopted a special resolution that it will be liquidated by the court; (ii) the company ceased business for one year; (iii) the company is insolvent; and (iv) the court is of the opinion that it is just and equitable that the company be wound-up. (Companies Law (1999), §342) (Insolvency Law (2018), §5-18)	The company may liquidate and dissolve by special resolution of the shareholders. (OBCA S. 193) In addition, a court may order the liquidation and dissolution of a company or any of its affiliated companies on the application of a shareholder if certain conditions are met. (OBCA S. 207)
Settlement and arrangement	The Israeli Companies Law provides that if a settlement or arrangement was proposed between a company and its creditors or shareholders (or between a company and any particular class of creditors or shareholders), then the court is entitled, upon the application of the company, creditor, shareholder or liquidator if the company is being liquidated, to order the company to convene a meeting of such creditors or shareholders, as applicable, in the manner instructed by the court. A court to which a said request for settlement or arrangement was submitted, is authorized, if convinced that this will help rehabilitate the company, to render an order according to which, for a period which shall not exceed nine months, no proceeding may continue or be commenced against the company, without the permission of the court and under the terms determined by the court. (Companies Law (1999), §350-351)	A liquidator may: retain lawyers, accountants, engineers, appraisers and other professional advisers; bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the company; carry on the business of the company as required for an orderly liquidation; sell by public auction or private sale any property of the company; do all acts and execute any documents in the name and on behalf of the company; borrow money on the security of the property of the company; settle or compromise any claims by or against the company; and do all other things necessary for the liquidation of the company and distribution of its property. (OBCA S. 223) Reorganization proceedings and liquidations can be conducted through the “arrangement” provisions in the OBCA in limited circumstances. (OBCA S. 182)

Matter	Israeli Law	Ontario (“ON”) Law ON Business Corporations Act (“OBCA”)
Convening general meetings by Directors and shareholders	The Israeli Companies Law permits directors and certain shareholders to convene a special general meeting of shareholders if the board of directors refuses to convene such meeting and add items to the meeting’s agenda.

(Companies Law (1999), §63-64) | The directors of a company shall call an annual meeting of shareholders not later than 18 months after the company comes into existence and subsequently not later than 15 months after holding the last preceding annual meeting. The directors of a company may call a special meeting of shareholders at any time.

(OBCA S. 94)

The holders of not less than 5% of the issued shares of a company that carry the right to vote at a meeting may requisition the directors to call a meeting of shareholders. Upon receiving such requisition, the directors shall call the meeting of shareholders, unless certain conditions apply. If the directors do not within 21 days after receiving such requisition call a meeting, any shareholder who signed the requisition may call the meeting.

The conditions for shareholders to convene a shareholders meeting under the OBCA are different than those under Israeli Law.

(OBCA S. 105(1)) |

PLAN OF DISTRIBUTION

The Corporation previously completed private placements of a total of 1,864,617 Subscription Receipts. The price for the Subscription Receipts, being US$0.66, was determined by the Corporation based on various factors, including without limitation, the estimated value of the tangible and intangible assets, the estimated value of the future cash flows, readily discernable market values of comparable companies, and the financial condition, past and projected operating results, capital structure, and business prospects, and other relevant factors such as the absence of a trading market for the stock of the Corporation. The Subscription Receipts were distributed pursuant to prospectus and registration exemptions in the applicable jurisdictions.

Each Subscription Receipt entitles the holder thereof, upon deemed exercise, to acquire without additional payment or consideration, one Common Share on the first (1st) business day following the date on which the last of the Restricted Share Release Conditions is achieved.

The Issuer will not receive any additional proceeds with respect to the Common Shares distributed on exercise of the Subscription Receipts.

its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside of Canada and the United States of America.

The Corporation is in the process of applying to list its Common Shares on the CSE. It is anticipated that the listing of the Common Shares on the CSE will be subject to the Corporation satisfying certain conditions of the CSE.

RISK FACTORS

The following information is a summary only of certain risk factors and is qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this Prospectus. These risks and uncertainties are not the only ones the Corporation is facing. Additional risks and uncertainties not presently known to the Corporation, or that it currently deems immaterial, may also impair its operations. If any such risks actually occur, the business, financial condition, liquidity and results of the Corporation’s operations could be materially adversely affected.

An investment in securities of the Corporation should only be made by persons who can afford a significant or total loss of their investment.

Industry Specific Risks

The Corporation is subject to industry regulatory risks.

The Corporation will be subject to a variety of laws and regulations domestically and abroad that involve the Internet, e-commerce, privacy, and protection of data and personal information, rights of publicity, acceptable content, intellectual property, advertising, marketing, distribution, data and information security, electronic contracts and electronic communications, competition, protection of minors, consumer protection, unfair commercial practices, product liability, taxation, economic or other trade prohibitions or sanctions, securities law compliance, and online payment and payment processing services. The Corporation may introduce new products, expand its activities in certain jurisdictions, or take other actions that may subject it to additional laws, regulations or other government scrutiny. For example, the Corporation will handle, collect, store, retrieve, transmit and use confidential, personal information relating to its customers and personnel for various business purposes, including marketing and financial purposes, and credit card information. The Corporation may share this personal or confidential information with vendors or other third parties in connection with processing of transactions, operating certain aspects of its business, combating fraud or for marketing purposes.

These laws, regulations and legislation, along with other applicable laws and regulations, which in some cases can be enforced by private parties or government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations, including pre-existing laws regulating communications and commerce in the context of the Internet and e-commerce, are often uncertain, particularly in the new and rapidly evolving industries in which the Corporation will operate, and may be interpreted and applied inconsistently across jurisdictions and inconsistently with its future policies and practices.

In addition, such restrictive measures may impact the ability or desire of third-party suppliers, including payment processors, to provide services to the Corporation globally or in certain jurisdictions. A supplier could require the Corporation, as a condition of its continued use of the supplier's products, to restrict access from customers in certain jurisdictions. Such third-party restrictions could affect the manner in which the Corporation provides its products or services in certain jurisdictions and adversely affect its financial results due to, among other things, the potential need to determine whether to change suppliers, which may not be on as favorable terms, or comply with the supplier's requested restrictions.

These laws and regulations, as well as any changes to the same and any related inquiries, investigations or any other government actions, may be costly to comply with and may delay or impede new product development, result in negative publicity, increase the Corporation's operating costs, require significant management time and attention, and subject it to remedies that may harm its business, including fines or demands or orders that modify or cease certain or all existing business practices, such as limiting its use of personal information to add value for customers, or implement costly and burdensome compliance measures. Any such consequences could adversely affect the Corporation's business, results of operations or financial condition.

The Corporation may be exposed to liability or the threat of liability in relation to the use of customer information and other personal and confidential information.

The Corporation collects, processes, maintains and uses data, including sensitive personal information on individuals, available to it through online activities and other customer interactions with its business. The Corporation's current and future marketing programs may depend on its ability to collect, maintain and use this information, and its ability to do so is subject to evolving laws and enforcement trends in Canada and other jurisdictions. The Corporation strives to comply with all applicable laws and other legal obligations relating to privacy, data protection and customer protection, including those relating to the use of medical information and data for marketing purposes. It is possible, however, that these requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another, conflict with other rules, conflict with the Corporation's practices or fail to be observed by its employees or business partners. If so, the Corporation may suffer damage to its reputation and be subject to proceedings or actions against it by governmental entities or others. Any such proceeding or action could hurt its reputation, force it to spend significant amounts to defend its practices, distract its management or otherwise have an adverse effect on its business.

Certain marketing practices of the Corporation rely upon e-mail, social media and other means of digital communication to communicate with consumers on its behalf. The Corporation may face risk if its use of e-mail, social media or other means of digital communication is found to violate applicable laws. The Corporation posts its privacy policy and practices concerning the use and disclosure of user data on its website. Any failure by the Corporation to comply with its posted privacy policy, anti-spam legislation or other privacy-related laws and regulations could result in proceedings which could potentially harm its business. In addition, as data privacy and marketing laws change, the Corporation may incur additional costs to ensure it remains in compliance. If applicable data privacy and marketing laws become more restrictive at the international, federal, provincial or state levels, the Corporation's compliance costs may increase, its ability to effectively engage customers via personalized marketing may decrease, its investment in its e-commerce platform may not be fully realized, its opportunities

for growth may be curtailed by its compliance burden and its potential reputational harm or liability for security breaches may increase.

The Corporation may fail to retain existing customers or add new customers.

The financial performance of the Corporation will be significantly determined by its success in adding, retaining, engaging and monetizing active customers of its product offerings. If people do not perceive the Corporation’s product offerings as enjoyable, reliable, relevant and trustworthy it may be unable to attract or retain customers or otherwise maintain or increase the frequency and duration of their engagement. Any number of factors could potentially negatively affect customer retention, growth and engagement, including if:

customers increasingly engage with the products or services of the Corporation’s competitors;
the Corporation fails to introduce, or delays the introduction of, new products or services (whether developed internally, licensed or otherwise obtained or developed in conjunction with third parties) that users find engaging or that work with a variety of operating systems or networks, or if it introduces new products or services, including using technologies with which it has little or no prior development or operating experience, or changes to its existing products or services, that are not favorably received by customers;
customers have difficulty installing, updating, or otherwise accessing the Corporation’s product offerings as a result of actions by it or third parties that it relies on to distribute and deliver its product offerings, or the Corporation fails to price its product offerings competitively or provide adequate customer service;
there are decreases in customer sentiment about the quality of the Corporation’s product offerings or concerns related to privacy, safety, security, or other factors, or technical or other problems prevent the Corporation from delivering its product offerings in a rapid and reliable manner or otherwise affect the customer experience, such as security breaches or failure to prevent or limit spam or similar content;
new industry standards are adopted, or customers adopt new technologies where the Corporation’s product offerings may be displaced in favor of other products or services, may not be featured or otherwise available, or may otherwise be rendered obsolete and unmarketable;
there are adverse changes in the Corporation’s product offerings that are mandated by legislation, regulatory authorities, or litigation, including settlements, or the Corporation does not obtain applicable regulatory or other approvals or renewals of such approvals to offer, directly or indirectly, its product offerings in new or existing jurisdictions;
the Corporation adopts policies or procedures related to areas such as customer data and information that are perceived negatively by its customers or the general public;
the Corporation elects to focus its customer growth and engagement efforts more on longer-term initiatives, or if initiatives designed to attract and retain customers and engagement are unsuccessful or discontinued, whether as a result of actions by the Corporation, third parties or otherwise; or

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the Corporation or other companies in the industries in which it operates are the subject of adverse media reports or other negative publicity.

If the Corporation is unable to maintain or increase its customer base or engagement, or effectively monetize its customer base’s use of its product offerings, its revenue and financial results may be adversely affected. Any decrease in customer retention, growth or engagement could render the Corporation’s products less attractive to customers.

The Corporation depends on suppliers and skilled labour.

The ability of the Corporation to compete and grow will be dependent on it having access, at a reasonable cost and in a timely manner, to skilled labour, equipment, parts and components. No assurances can be given that the Corporation will be successful in maintaining its required supply of skilled labour, equipment, parts and components.

The Corporation will rely on third-party owned communication networks.

The delivery of the Corporation’s offerings and a significant portion of the Corporation’s revenues will be dependent on the continued use and expansion of third party-owned communication networks, including wireless networks and the Internet. No assurance can be given of the continued use and expansion of these networks as a medium of communications for the Corporation.

The Corporation will be dependent on the interoperability of such networks with popular mobile operating systems, technologies, networks and standards that it does not control, such as the Android and iOS operating systems, and any changes, bugs, technical or regulatory issues in such systems, the Corporation’s relationships with mobile partners, manufacturers and carriers, or in their terms of service or policies that degrade the Corporation’s product offerings’ functionality, may reduce or eliminate its ability to distribute its product offerings, give preferential treatment to competitive products, limit its ability to deliver high quality product offerings, or impose fees or other charges related to delivering its product offerings.

In addition, increasing traffic, user numbers or bandwidth requirements may result in a decline in Internet (or a subset thereof, including in particular mobile Internet) performance and/or Internet reliability. Internet outages or delays or loss of network connectivity may result in partial or total failure of the Corporation’s offerings, additional and unexpected expenses to fund further development or to add programming personnel to complete a development project, loss of revenue which could have a material adverse effect on the Corporation’s prospects, business, financial condition or results of operations.

The Corporation will be reliant on information technology systems and may be subject to damaging cyber-attacks.

The Corporation has entered into agreements with third parties for hardware, software, telecommunications and other information technology (“IT”) services. The Corporation’s operations depend, in part, on how well it and its suppliers and vendors protect networks, equipment, IT systems and software against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional damage and destruction, fire, power loss, hacking,

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computer viruses, spyware, vandalism and theft. The Corporation's operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Corporation's operations, reputation and results of operations.

The Corporation has not experienced any material losses to date relating to cyber-attacks or other information security breaches, but there can be no assurance that the Corporation will not incur such losses in the future. The Corporation's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber-security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access is a priority. As cyber-threats continue to evolve, the Corporation may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

The Corporation may be subject to risks that may arise from being unable to safeguard its technology and brand.

The Corporation's success is currently expected to depend on its ability to obtain patent protection and may in the future need to depend on its ability to obtain trademark protection for the names or symbols under which it markets its product offerings and to obtain copyright protection of its proprietary technologies and creative assets. The Corporation may not be able to build and maintain goodwill in such future trademarks or obtain trademark protection. There can be no assurance that any trademark or copyright will provide competitive advantages for the Corporation or that its intellectual property will not be successfully challenged or circumvented by competitors.

Source codes for the Corporation's technology may receive protection under international copyright laws. However, for many third parties who intend to use the Corporation source codes without its consent, the presence of copyright protection in the source codes alone may not be enough of a deterrent to prevent such use. As such the Corporation may need to initiate legal proceedings following such use to obtain orders to prevent further use of the source code.

The Corporation may in the future also need to rely on trade secrets and proprietary know-how. Although the Corporation will generally require its employees and independent contractors to enter into confidentiality and intellectual property assignment agreements, it cannot be assured that the obligations therein will be maintained and honored. If these agreements are breached, it is unlikely that the remedies available to the Corporation will be sufficient to compensate it for the damages suffered even if it promptly applies for injunctive relief. In spite of confidentiality agreements and other methods of protecting trade secrets, the Corporation's proprietary information could become known to or independently developed by competitors. If the Corporation fails to adequately protect its intellectual property and confidential information, its business may be harmed, and its liquidity and results of operations may be materially adversely impacted.

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The Corporation may be subject to risks due to the insufficiency of obtained patent protection, or if it loses patent protection, its ability to prevent competitors from commercializing similar or identical products could adversely affect the Corporation.

The patent position of companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. As a result, the issuance, scope, validity, enforceability and commercial value of the Corporation’s patent rights are highly uncertain. The Corporation’s pending and future patent applications may not result in patents being issued which protect the Corporation’s products or which effectively prevent others from commercializing competitive products. Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Even if patent applications we own or in-license in the future issue as patents, they may not issue in a form that will provide the Corporation with any meaningful protection, prevent competitors or other third parties from competing with the Corporation, or otherwise provide the Corporation with any competitive advantage. Any patents that the Corporation owns may be challenged or circumvented by third parties or may be narrowed or invalidated as a result of challenges by third parties. Consequently, the Corporation does not know whether the Corporation’s product will be protectable or remain protected by valid and enforceable patents. The Corporation’s competitors or other third parties may be able to circumvent the Corporation’s patents by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect the Corporation’s business, financial condition, results of operations and prospects. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and the Corporation’s patents may be challenged in the courts or patent offices in the United States and abroad. The Corporation’s may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, revocation, re-examination, post-grant review and inter partes review, or other similar proceedings challenging the Corporation’s owned patent rights. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, the Corporation’s patent rights, allow third parties to commercialize the Corporation’s product candidates and compete directly with the Corporation, without payment to the Corporation, or result in the Corporation’s inability to manufacture or commercialize products without infringing third-party patent rights. Moreover, the Corporation’s patents may become subject to post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge the Corporation’s priority of invention or other features of patentability with respect to the Corporation’s patents. Such challenges may result in loss of patent rights, loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, which could limit the Corporation’s ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of the Corporation’s technologies or product candidates. Such proceedings also may result in substantial cost and require significant time from the Corporation’s consultants and management, even if the eventual outcome is favorable to us. In addition, if the breadth or strength of protection provided by the Corporation’s patents is threatened, regardless of the outcome, it could dissuade companies from collaborating with the Corporation’s to license, develop or commercialize current or future products.

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The Corporation may be subject to risks related to the protection and enforcement of its intellectual property rights, or intellectual property it licenses from others, and may become subject to allegations that it or its licensors are in violation of intellectual property rights of third parties.

The ownership, licensing and protection of trademarks and other intellectual property rights are significant aspects of the Corporation’s future success.

It is possible that the Corporation will not be able to register, maintain registration for or enforce all of its intellectual property, including trademarks, in all key jurisdictions. The intellectual property registration process can be expensive and time-consuming, and the Corporation may not be able to file and prosecute all necessary or desirable intellectual property applications at a reasonable cost or in a timely manner or may obtain intellectual property registrations which are invalid. It is also possible that the Corporation will fail to identify patentable aspects of inventions made in the course of their development and commercialization activities before it is too late to obtain patent protection for them. Further, changes in either intellectual property laws or interpretation of intellectual property laws in Canada, and other countries may diminish the value of the Corporation’s intellectual property rights or narrow the scope of its intellectual property protection. As a result, the Corporation’s current or future intellectual property portfolio may not provide it with sufficient rights to protect its business, including its products, processes and brands.

Termination or limitation of the scope of any intellectual property licence may restrict or delay or eliminate the Corporation’s ability to develop and commercialize its products, which could adversely affect its business. The Corporation cannot guarantee that any third-party technology it licenses will not be unenforceable or licensed to its competitors or used by others. In the future, the Corporation may need to obtain licences, renew existing licence agreements in place at such time or otherwise replace existing technology. The Corporation is unable to predict whether these licence agreements can be obtained or renewed or the technology can be replaced on acceptable terms, or at all.

Unauthorized parties may attempt to replicate or otherwise obtain and use the Corporation’s products, brands and technology. Policing the unauthorized use of the Corporation’s current or future trademarks, patents or other intellectual property rights could be difficult, expensive, time consuming and unpredictable, as may be enforcing these rights against unauthorized use by others. Identifying the unauthorized use of intellectual property rights is difficult as the Corporation may be unable to effectively monitor and evaluate the products being distributed by its competitors, including parties such as unlicensed dispensaries and black-market participants, and the processes used to produce such products. In addition, in any infringement proceeding, some or all of the Corporation’s trademarks or other intellectual property rights or other proprietary know-how, or those it licences from others, or arrangements or agreements seeking to protect the same for the Corporation’s benefit, may be found invalid, unenforceable, anti-competitive or not infringed; may be interpreted narrowly; or could put existing intellectual property applications at risk of not being issued.

In addition, other parties may claim that the Corporation’s products, or those it licenses from others, infringe on their intellectual property, including their proprietary or patent protected rights. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources and legal fees, result in injunctions or temporary restraining orders or require the payment of damages. As well, the Corporation may need to obtain licences from third parties who allege that it has infringed on their lawful rights. Such licences may not be available on terms

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acceptable to the Corporation, or at all. In addition, the Corporation may not be able to obtain or utilize on terms that are favorable to it, or at all, licences or other rights with respect to intellectual property that the Corporation does not own.

The Corporation also relies on certain trade secrets, technical know-how and proprietary information that are not protected by patents to maintain its competitive position. The Corporation’s trade secrets, technical know-how and proprietary information, which are not protected by patents, may become known to or be independently developed by competitors, which could adversely affect the Corporation.

Risks Relating to the Corporation’s Business

The Corporation has limited operating history.

The Corporation has limited operating history and is still in the early stages of implementing its strategic growth plan of building its patent pending Shelfie product focused on providing a robotic retail shelf monitoring system using proprietary software that utilizes advanced machine learning and image processing algorithms to automatically optimize inventory management while ensuring an enhanced customer experience. There can be no assurance that the market will be receptive to the Corporation’s product and service offerings, nor that the Corporation will ever operate profitably. If it fails to achieve profitability, or if the time required to achieve profitability is longer than anticipated, the Corporation may not be able to sustain its business. Even if the Corporation does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis.

The Corporation’s operating results may fluctuate.

The Corporation’s operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of its control. Accordingly, Shelfie’s results to date may not be an indication of the Corporation’s future performance. Factors that may affect the Corporation’s operating results include increased competition for assets, expertise and an increased level of expenses. It is also possible that, in the future, the Corporation’s operating results will fall below the expectations of security analysts or investors. If this occurs the trading price of the Corporation Shares may decline significantly.

The Corporation may have difficulty obtaining additional funding.

The Corporation may require additional funding to complete its business objectives. There is no assurance that it will be successful in obtaining required financing in the future or that such financing will be available on terms acceptable to the Corporation. Volatile capital markets, a claim against the Corporation, a significant event disrupting the Corporation’s business, or other factors may make it difficult or impossible to obtain financing through debt, equity, or other means on favourable terms, or at all. In addition, any future financing may also be dilutive to existing shareholders of the Corporation.

The Corporation operates under intensely competitive conditions.

The industries within which the Corporation will operate are rapidly evolving and intensely competitive, and are subject to changing technology, shifting user needs, and frequent introductions of new offerings. The Corporation’s potential competitors include large and established companies as

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well as other start-up companies. Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than the Corporation, which could negatively impact its business. Furthermore, new competitors, whether licensed or not, may enter the Corporation's key product and/or geographic markets. There is no assurance that the Corporation will be able to maintain or grow its position in the marketplace.

As a result of the foregoing, among other factors, the Corporation may have to continually introduce and successfully market new and innovative technologies, product offerings and product enhancements to remain competitive and effectively stimulate customer demand, acceptance and engagement. The process of developing new product offerings and systems is inherently complex and uncertain, and new product offerings may not be well received by customers, even if well-reviewed and of high quality. Furthermore, the Corporation may not recover the often substantial up-front costs of developing and marketing new technologies and product offerings, or recover the opportunity cost of diverting management and financial resources away from other technologies and product offerings. Additionally, if the Issuer cannot efficiently adapt its processes and infrastructure to meet the needs of its product offering innovations, its business could be negatively impacted.

The Corporation relies upon its management and certain key personnel.

The success of the Corporation will be dependent upon the ability, expertise, judgment, discretion, and good faith of its key executives, including the directors and officers of the Corporation and a small number of highly skilled and experienced executives and personnel. While employment agreements are customarily used as a primary method of retaining the services of key employees, these agreements cannot assure the continued services of such employees. Any loss of the services of such individuals could have a material adverse effect on the Corporation's business, operating results, or financial condition. The competition for highly skilled technical, research and development, management and other employees is high and there can be no assurance that the Corporation will be able to engage or retain the services of such qualified personnel in the future.

The Corporation's business requires specialized knowledge and skill.

Various aspects of the Corporation's business require specialized skills and knowledge. Such skills and knowledge include, but are not limited to, expertise related to operations, software development, application security, mobile applications, marketing, design, delivery methods, logistics and content creation, as well as legal compliance, finance and accounting. The Corporation expects to rely upon various legal and financial advisors, consultants and others in the operation and management of its business.

The Corporation does not presently maintain any insurance.

The Corporation's insurance coverage may not completely cover the risks related to its business and operations. The Corporation does not presently maintain any insurance coverage such as material damage insurance, product liability insurance, public liability insurance, marine cargo insurance, money insurance, motor insurance, employees' compensation insurance, employees' life insurance and loss of profit insurance. If any claims for injury or damages are brought against the Corporation

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or if the Corporation experiences any business disruption, litigation or natural disaster, the Corporation might incur substantial costs and diversion of resources, for which the Corporation will not be covered by insurance. For example, the Corporation may face product liability claims on the grounds that the use of the Corporation products has resulted in bodily injuries, property damage or other losses. Damages awarded in a product liability action could be substantial and may require the Corporation to pay significant monetary damages for which the Corporation has no insurance. Furthermore, although the Corporation may have legal recourse against third-parties, an attempt to enforce the Corporation rights against a third-party may be expensive, time-consuming and ultimately futile. Should an uninsured loss or a loss in excess of insured limits occur (if as and when the Corporation purchases insurance), the Corporation could suffer financial losses, as well as damage to the Corporation's reputation, lose all or a portion of the Corporation's production capacity. Any material uninsured loss could have a material adverse effect on the Corporation's business, financial position and results of operations.

The Corporation’s products may be subject to software product defects.

The Corporation’s products incorporate elements that are developed in-house, as well as elements that are acquired or licensed from third party vendors. From time to time, errors or defects may be found in Shelfie’s products and new errors or defects may be detected in the future. Such errors or defects may damage the Corporation’s ability to provide its products and services effectively, which may result in a loss of revenues or an increase in warranty claims and/or provisions for doubtful accounts. Such errors or defects may also expose the Corporation to potential litigation and to reputational damage.

The Corporation’s products are acquired or licensed from third party vendors.

The Corporation’s products incorporate elements that are acquired or licensed from third party vendors. While the Corporation believes that these elements can be obtained from other sources or can be developed in-house, if one of its current vendors were to stop licensing or selling products to the Corporation or were to cease business operations, this may interrupt the Corporation’s ability to provide its products and services to its own customers, which may result in a loss of revenues or may also expose the Corporation to potential litigation or damages.

Conflicts of interest may arise.

Members of the Corporation Board may become directors of other companies or have significant shareholdings in other technology companies and, to the extent that such other companies may participate in ventures in which the Corporation may participate, the Corporation Board may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. The Corporation and the Corporation Board will attempt to minimize such conflicts. In the event that such a conflict of interest arises at a meeting of the Corporation Board, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases the Corporation Board will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. Any conflicts will be subject to the procedures and remedies as provided under the OBCA. The provisions of the OBCA require a director or officer of a corporation who has a material interest in a contract or transaction of a corporation, or a director or officer of a corporation who is a director or officer of or has a material interest in a Person who has a material interest in a contract or transaction with the corporation, to

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disclose his or her interest and, in the case of directors, to refrain from voting on any matter in respect of such contract unless permitted under the OBCA, as the case may be. Other than as indicated, the Corporation has no other procedures or mechanisms to deal with conflicts of interest.

Changes in the political environment may create regulatory risks.

Any changes in government policy may result in changes to laws affecting ownership of assets, monetary policies, taxation, rates of exchange, environmental regulations, labour relations, and return of capital. This may affect the Corporation’s ability to continue to operate business as it intends to. The possibility that future governments may adopt substantially different policies, which might extend to expropriation of assets, cannot be ruled out.

Foreign exchange rates may fluctuate.

Foreign exchange rate fluctuations may adversely affect the Corporation’s financial position and results. Shelfie currently does not have in place a policy for managing or controlling foreign currency risks. Even if such a policy were to be implemented by the Corporation, there is no assurance that such policy would eliminate this risk.

Sales to foreign customers are subject to anti-corruption and bribery laws.

Sales to foreign customers are subject to Israeli and foreign laws and regulations, including, without limitation, the Corruption of Foreign Public Officials Act (Canada), the Foreign Corrupt Practices Act (United States), Article Five: Bribery Offenses of the Israeli Penal Law and other anti-corruption laws. Any failure by the Corporation, its employees, foreign representatives and consultants or others working on its behalf to comply with it could result in administrative, civil, or criminal liabilities, including suspension, debarment from bidding for or performing government contracts, which could have a material adverse effect on the Corporation’s business operations.

The Corporation may require substantial capital in the future.

The Corporation may make substantial capital expenditures for the development and production of its assets in the future. Future activities may require the Corporation to alter its capitalization significantly. Any restriction on the Corporation’s access to sufficient capital for its operations could have a material adverse effect on the Corporation’s financial condition, results of operations or prospects. In particular, failure to obtain sufficient financing could cause the Corporation to forfeit its interest in certain assets, miss certain acquisition opportunities and reduce or terminate its operations.

The Corporation may be unable to achieve revenue growth and development.

The Corporation is an early stage company attempting to grow its business. In addition, the Corporation is subject to a variety of business risks generally associated with developing companies. Future development and expansion could place significant strain on the Corporation’s management personnel and likely will require the Corporation to recruit additional management personnel, and there is no assurance that it will be able to do so. As its operations grow in size, scope and complexity and as it identifies and pursues new opportunities, the Corporation may need to increase in scale its infrastructure (financial, management, informational, personnel and otherwise).

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In addition, the Corporation will need to effectively execute on business opportunities and continue to build on and deploy its corporate development and marketing assets as well as access sufficient new capital, as may be required. The ability to successfully complete acquisitions and to capitalize on other growth opportunities may redirect its limited resources and require expansion of its infrastructure. This will require the Corporation to commit financial, operational and technical resources in advance of an increase in the volume of business, with no assurance that the volume of business will increase. There can be no assurance the Corporation will be able to respond adequately or quickly enough to the changing demands that material expansion will impose on management, team members and existing infrastructure, and changes to its operating structure may result in increased costs or inefficiencies that it cannot anticipate. Changes as the Corporation grows may have a negative impact on its operations, and cost increases resulting from its inability to effectively manage its growth could adversely impact its profitability. In addition, continued growth could also strain the Corporation's ability to maintain reliable service levels for its clients, develop and approve its operational, financial and management controls, enhance its reporting systems and procedures and recruit, train and retain highly-skilled personnel.

Failure to effectively manage growth could result in difficulty or delays in servicing clients, declines in quality or client satisfaction, increases in costs, difficulties in introducing new products or applications or other operational difficulties, and any of these difficulties could adversely impact the Corporation's business performance and results of operations. There can be no assurance that the Corporation will effectively be able to manage its expanding operations, including any acquisitions, that its growth will result in profit, that it will be able to attract and retain sufficient management personnel necessary for growth or that it will be able to successfully make strategic investments or acquisitions.

There are factors which may prevent the Corporation from the realization of growth targets.

There is a risk that the Corporation's resources will not be developed on time, on budget, or at all, as development can be adversely affected by a variety of factors, including some that are discussed elsewhere in these "Risk Factors" and the following:

delays in obtaining, or conditions imposed by, regulatory approvals;
facility design errors;
environmental pollution; non-performance by third party contractors; increases in materials or labour costs; construction performance falling below expected levels of output or efficiency;
breakdown, aging or failure of equipment or processes;
contractor or operator errors;
operational inefficiencies;
labour disputes, disruptions or declines in productivity; inability to attract sufficient numbers of qualified workers; disruption in the supply of energy and utilities; and
major incidents and/or catastrophic events such as fires, explosions, storms, or physical attacks.

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The Corporation's actual financial position and results of operations may differ materially from the expectations of the Corporation's management.

In the past, the Corporation has experienced changes in its operating plans and delays in its plans. If this were to occur again in the future, the Corporation's revenue, net income and cash flow may differ materially from the Corporation's projected revenue, net income and cash flow. The process for estimating the Corporation's revenue, net income and cash flow requires the use of judgment in determining the appropriate assumptions and estimates. These estimates and assumptions may be revised as additional information becomes available and as additional analyses are performed. In addition, the assumptions used in planning may not prove to be accurate, and other factors may affect the Corporation's financial condition or results of operations.

The Corporation may incur significant ongoing costs and obligations related to its investment in infrastructure, growth, regulatory compliance and operations.

The Corporation may incur significant ongoing costs and obligations related to its investment in infrastructure and growth and for regulatory compliance, which could have a material adverse impact on the Corporation's results of operations, financial condition and cash flows. In addition, future changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to the Corporation's operations, increased compliance costs or give rise to material liabilities, which could have a material adverse effect on the business, results of operations and financial condition of the Corporation. The Corporation's efforts to grow its business may be costlier than expected, and it may not be able to increase its revenue enough to offset its higher operating expenses. The Corporation may incur significant losses in the future for a number of reasons, including the other risks described in this Prospectus, and unforeseen expenses, difficulties, complications and delays, and other unknown events. If the Corporation is unable to achieve and sustain profitability, the market price of the Common Shares may significantly decrease.

The size of the Corporation's target market is difficult to quantify, and investors will be reliant on their own estimates on the accuracy of market data.

There is a lack of information about comparable companies available for potential investors to review in deciding about whether to invest in the Corporation and, few, if any, established companies whose business model the Corporation can follow or upon whose success the Corporation can build. Accordingly, investors will have to rely on their own estimates in deciding about whether to invest in the Corporation. There can be no assurance that the Corporation's estimates are accurate or that the market size is sufficiently large for its business to grow as projected, which may negatively impact its financial results.

The Corporation's business is dependent on key supply chains which could be adversely disrupted by a number of factors including, among others, major health issues or pandemics.

The Corporation and its suppliers may be affected by, among other things, disruptions related to major health issues or pandemics, increases in labor and fuel costs, labor disputes and disruptions, regulatory changes, political or economic instability or civil unrest, natural disasters, trade restrictions, tariffs, transport capacity and costs and other factors relating to trade. In particular, major health issues and pandemics, such as the global impact of the coronavirus, have and may impact commerce and travel

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and may adversely affect trade and global and local economies. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on the Corporation's business. These factors that are beyond the Corporation's control, may adversely affect the Corporation and its suppliers or cause disruptions to their and the Corporation's businesses and may impact their ability to supply to the Corporation.

The Corporation may not be able to develop its products, which could prevent it from ever becoming profitable.

If the Corporation cannot successfully develop, manufacture and distribute its products, or if the Corporation experiences difficulties in the development process, such as capacity constraints, quality control problems or other disruptions, the Corporation may not be able to develop market-ready commercial products at acceptable costs, which would adversely affect the Corporation's ability to effectively enter the market. A failure by the Corporation to achieve a low-cost structure through economies of scale and manufacturing processes would have a material adverse effect on the Corporation's commercialization plans and the Corporation's business, prospects, results of operations and financial condition.

The Corporation may seek to enter into strategic alliances including contractual relationships, joint ventures, selective acquisitions, licensing arrangements or other relationships, or expand the scope of currently existing relationships, with third parties that the Corporation believes will have a beneficial impact, and there are risks that such strategic alliances or expansions of the Corporation's currently existing relationships may not enhance its business in the desired manner.

The Corporation may in the future enter into, strategic alliances including contractual relationships, joint ventures, selective acquisitions, licensing arrangements or other relationships with third parties that it believes will complement or augment its existing business. The Corporation's ability to complete further such strategic alliances is dependent upon, and may be limited by, among other things, the availability of suitable candidates and capital. In addition, strategic alliances could present unforeseen integration obstacles or costs, may not enhance the Corporation's business and may involve risks that could adversely affect the Corporation, including the investment of significant amounts of management time that may be diverted from operations in order to pursue and complete such transactions or maintain such strategic alliances. Future strategic alliances could result in the incurrence of debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that the Corporation's existing strategic alliances will continue to achieve, the expected benefits to its business or that it will be able to consummate future strategic alliances on satisfactory terms, or at all.

The Corporation may not be able to successfully identify and execute future acquisitions or dispositions or successfully manage the impacts of such transactions on its operations.

The Corporation expects to selectively seek strategic acquisitions in the future. The Corporation's ability to identify, consummate and integrate effectively any future potential acquisitions on terms that are favorable to it may be limited by the number of attractive acquisition targets, internal demands on its resources and, to the extent necessary, its ability to obtain financing on satisfactory terms, if at all. Acquisitions may expose the Corporation to additional risks including difficulties in integrating administrative, financial reporting, operational and information systems and managing newly acquired operations and improving their operating efficiency, difficulties in maintaining uniform standards,

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controls, procedures and policies through all of the Corporation’s operations, entry into markets in which the Corporation has little or no direct experience; difficulties in retaining key employees of the acquired operations; and disruptions to its ongoing business. In addition, future acquisitions could result in the incurrence of additional debt, costs, and contingent liabilities to the Corporation. The Corporation may also incur costs for and divert management attention to potential acquisitions that are never consummated. For acquisitions that are consummated, expected synergies may not materialize. The Corporation’s failure to effectively address any of these issues could have a material adverse effect on its business, financial condition, results of operations and cash flows in the future.

The Corporation’s quality control systems may not operate effectively.

The quality and safety of the Corporation’s products are critical to the success of its business and operations. As such, it is imperative that the Corporation’s (and its service providers’) quality control systems operate effectively and successfully. Quality control systems can be negatively impacted by the design of the quality control systems, the quality training program, and adherence by employees to quality control guidelines. Although the Corporation strives to ensure that all of its service providers have implemented and adhere to high caliber quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse effect on the business and operating results of the Corporation.

The Corporation may become subject to litigation in the ordinary course of business.

The Corporation may become subject to litigation from time to time in the ordinary course of business, some of which may adversely affect its business. Should any litigation in which the Corporation becomes involved be determined against the Corporation, such a decision could adversely affect the Corporation’s ability to continue operating, the value or market price for the common shares and could require the use of significant resources. Even if the Corporation is involved in litigation and is ultimately successful, litigation can require the redirection of significant resources. Litigation may also create a negative perception of the Corporation’s brand.

The Corporation may incur additional indebtedness.

The Corporation may finance future activities wholly or partially with debt, which may increase the Corporation’s debt levels above industry standards. Any debt financing secured in the future could involve restrictive covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for the Corporation to obtain additional capital and to pursue business opportunities, including potential acquisitions.

Management may not be able to successfully implement adequate internal controls over financial reporting.

Proper systems of internal control over financial reporting and disclosure are critical to the operation of a public company. However, the Corporation does not expect that its internal control over financial reporting and disclosure will prevent all errors and remove all risk of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of such controls must be considered relative to their costs.

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Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in a timely manner or at all. If the Corporation cannot provide reliable financial reports or prevent fraud, its reputation and operating results could be materially adversely affected, which could cause investors to lose confidence in the Corporation and its reported financial information, which in turn could result in a reduction in the value of its common shares.

If the Corporation has a material weakness in its internal controls over financial reporting, investors could lose confidence in the reliability of the Corporation's financial statements, which could result in a decrease in the value of the Corporation's securities.

One or more material weaknesses in the Corporation's internal controls over financial reporting could occur or be identified in the future. In addition, because of inherent limitations, the Corporation's internal controls over financial reporting may not prevent or detect misstatements, and any projections of any evaluation of effectiveness of internal controls to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the Corporation's policies or procedures may deteriorate. If the Corporation fails to maintain the adequacy of its internal controls, including any failure or difficulty in implementing required new or improved controls, its business and results of operations could be harmed, the Corporation may not be able to provide reasonable assurance as to its financial results or meet its reporting obligations and there could be a material adverse effect on the price of its securities.

The Corporation has negative operating cash flow.

There is no guarantee that the Corporation will ever become profitable. The Corporation currently has a negative operating cash flow and that may continue to have that for the foreseeable future. To date, the Corporation has only recently generated revenues and a large portion of the Corporation's expenses are fixed, including expenses related to facilities, equipment, contractual commitments and personnel. As a result, the Corporation expects its net losses from operations will at least continue in the short term. The Corporation's ability to generate additional revenues and potential to become profitable will depend largely on its ability to cultivate, manufacture and market its products. There can be no assurance that any such events will occur or that the Corporation will ever become profitable. Even if the Corporation does achieve profitability, it cannot predict the level of such profitability. If the Corporation sustains losses over an extended period of time, it may be unable to continue its business.

The Corporation may be subject to credit risk.

Credit risk is the risk that the counterparty to a financial instrument fails to meet its contractual obligations, resulting in a financial loss to the Corporation. There are no assurances that the Corporation's counterparties or customers will meet their contractual obligations to the Corporation.

Tax and accounting requirements may change in ways that are unforeseen to the Corporation and it may face difficulty or be unable to implement or comply with any such changes.

The Corporation is subject to numerous tax and accounting requirements, and changes in existing accounting or taxation rules or practices, or varying interpretations of current rules or practices, could

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have a significant adverse effect on its financial results, the manner in which it conducts its business or the marketability of any of its products.

The Corporation may not be able to renew or secure adequate insurance to protect its assets, operations and employees.

The Corporation may not be able to renew or secure adequate insurance to protect its assets, operations and employees. While the Corporation may, in the future obtain insurance coverage to address all material risks to which it is exposed and is adequate and customary in its proposed state of operations, such insurance will be subject to coverage limits and exclusions and may not be available for the risks and hazards to which the Corporation is expected to be exposed. In addition, no assurance can be given that such insurance will be adequate to cover the Corporation's liabilities or will be generally available in the future, or if available, that premiums will be commercially justifiable. If the Corporation were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if the Corporation were to incur such liability at a time when it is not able to obtain liability insurance, its business, results of operations and financial condition could be materially adversely affected.

Risks Related to the Ownership of the Common Shares

The price of securities in public markets may experience significant fluctuations.

The price of the Common Shares in public markets may experience significant fluctuations.

The market price for the Common Shares may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond the Corporation's control, including the following: (i) actual or anticipated fluctuations in its quarterly results of operations; (ii) recommendations by securities research analysts; (iii) changes in the economic performance or market valuations of other issuers that investors deem comparable to the Corporation; (iv) the addition or departure of the Corporation's executive officers and other key personnel; (v) the release or expiration of lock-up or other transfer restrictions on the Common Shares; (vi) sales or perceived sales, or expectation of future sales, of the Common Shares; (vii) significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Corporation or its competitors; and (viii) news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in the Corporation's industry or target markets.

Financial markets have recently experienced significant price and volume fluctuations which have affected the market prices of equity securities of public entities. In recent years, the securities markets in the United States and Canada, and the CSE in particular, have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price that have not necessarily been related to the operating performance, underlying asset values, or prospects of such companies. In many cases, these fluctuations, and the effect that they have on market prices, have been unrelated to the operating performance, underlying asset values or prospects of such entities. Accordingly, the market price of the Common Shares may decline even if the Corporation's operating results or prospects have not changed. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed not to be temporary, which may result in impairment losses to the Corporation. Furthermore, certain investors may base their

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investment decisions on considerations of the Corporation’s environmental, governance and social practices or the Corporation’s industry as a whole, and its performance in these areas against such institutions’ respective investment guidelines and criteria. The failure to satisfy such criteria may result in limited or no investment in the Common Shares by those institutions, which could materially adversely affect the trading price of the Common Shares.

There can be no assurance that continuing fluctuations in the price and volume of equity securities will not occur. If such increased levels of volatility and market turmoil continue for a protracted period of time, there could be a material adverse effect on the trading price of the Common Shares.

There is a significant share liquidity risk.

The Corporation cannot predict at what prices the Corporation Shares will trade following Closing, and there can be no assurance that an active trading market in the Corporation Shares will develop or be sustained. In particular, the market for shares in smaller public companies is less liquid than for larger public companies. Consequently, the price of the Resulting Issue Shares may be subject to greater fluctuation and may be difficult to sell. There is a significant liquidity risk associated with an investment in the Corporation Shares.

If securities or industry analysts do not continue to publish research, or publish inaccurate or unfavourable research, about the Corporation’s business, the Common Share price and trading volume could decline.

The trading market for the Common Shares will depend, in part, on the research and reports that securities or industry analysts publish about the Corporation or its business. The Corporation does not have any control over these analysts. Securities and industry analysts do not currently, and may never, publish research on the Corporation. If no securities or industry analysts commence coverage of the Corporation, the trading price for the Common Shares would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover the Corporation downgrade the Common Shares or publish inaccurate or unfavorable research about its business, the Corporation’s share price would likely decline. In addition, if the Corporation’s operating results fail to meet the forecast of analysts, its share price would likely decline. If one or more of these analysts cease coverage of the Corporation or fail to publish reports on the Corporation regularly, demand for the Common Shares could decrease, which might cause the Common Share price and trading volume to decline.

The Corporation continues to sell shares for cash to fund operations, expansion, and mergers and acquisitions that will dilute the current shareholders.

The continued development of the Corporation will require additional financing. If additional funds are raised through issuances of equity or convertible debt securities, existing shareholders could suffer significant dilution, and any new equity securities issued could have rights, preferences and privileges superior to those of holders of Common Shares. The Corporation’s articles permit the issuance of an unlimited number of Common Shares, and shareholders will have no pre-emptive rights in connection with such further issuance. The directors of the Corporation have discretion to determine the price and the terms of issue of further issuances. Moreover, additional Common Shares will be issued by the Corporation on the exercise of Options under the Amended and Restated Omnibus Compensation Plan

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and upon the exercise of outstanding warrants. In addition, from time to time, the Corporation may enter into transactions to acquire assets or the shares of other companies.

It is not anticipated that any dividends will be paid to holders of Common Shares for the foreseeable future.

The Corporation intends to retain earnings, if any, to finance the growth and development of its business and does not intend to pay cash dividends on the Common Shares in the foreseeable future. The payment of future cash dividends, if any, will be reviewed periodically by the Board and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and conditions and other factors.

The Corporation is subject to ongoing reporting requirements under applicable securities law and CSE Policies.

As a reporting issuer, the Corporation is subject to reporting requirements under applicable securities law and CSE Policies. Compliance with these requirements result in legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on existing systems and resources. Among other things, the Corporation is required to file annual, quarterly and current reports with respect to its business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight is required. As a result, management's attention may be diverted from other business concerns, which could harm the Corporation's business and results of operations. The Corporation may need to hire additional employees to comply with these requirements in the future, which would increase its costs and expenses. Management of the Corporation believes that being a reporting issuer makes it more expensive to maintain director and officer liability insurance. This factor could also make it more difficult for the Corporation to retain qualified directors and executive officers.

ARTIFICIAL INTELLIGENCE

The Corporation incorporates artificial intelligence, and machine learning, into some of its products. This technology is new and developing and may present both compliance and reputational risks.

The Corporation relies on artificial intelligence and machine learning in the operation of some of its products. The artificial intelligence models that we use are trained using various data sets. If the Corporation's artificial intelligence models are incorrectly designed or implemented or do not receive pictures or visual data, they may produce inaccurate or unreliable results, negatively impacting the performance and reliability of the artificial intelligence solutions. The effectiveness of the Corporation's artificial intelligence models depends on the quality and completeness of the data used for training. If the data is incomplete, inadequate, or biased, it could lead to suboptimal model performance, impairing the functionality of the artificial intelligence solutions. Any malfunction or unexpected behavior in the Corporation's artificial intelligence driven systems could disrupt the Corporation's operations, leading to increased downtime and higher maintenance costs for our

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customers, and potential loss of revenue. Additionally, failures in the performance of the Corporation’s artificial intelligence models could damage the Corporation’s reputation, erode customer trust, and result in loss of business and negative publicity.

The Corporation may not be able to protect the Corporation’s intellectual property rights throughout the world.

There are significant risks involved in developing, maintaining and deploying machine learning, artificial intelligence and automated decision making technologies and there can be no assurance that the usage of such technologies will always enhance the Corporation’s products or services or be cost effective and more generally beneficial to the Corporation’s business, including the Corporation’s efficiency or profitability. In particular, if these artificial intelligence or machine learning models or automated decision making technologies are incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data or on data to which the Corporation does not have sufficient rights; and/or are adversely impacted by unforeseen defects, technical challenges, cyber security threats or material performance issues, the performance of the Corporation’s products, services, and business, as the Corporation’s reputation and the reputations of the Corporation’s customers, could suffer or the Corporation could incur liability through the violation of laws or contracts to which the Corporation is a party or through other civil claims. Further, the Corporation’s ability to continue to develop or use such models or technologies may be dependent on access to specific third-party software and infrastructure, such as processing hardware or third-party artificial intelligence models, and the Corporation cannot control the availability or pricing of such third-party software and infrastructure. In addition, market acceptance and consumer perceptions of artificial intelligence and machine learning technologies is uncertain at this point.

A number of aspects of intellectual property protection in the field of artificial intelligence and machine learning are currently under development, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for artificial intelligence and machine learning systems and relevant system input and outputs. If the Corporation fails to obtain protection for the intellectual property rights concerning the Corporation’s automated decision making, artificial intelligence and machine learning technologies, or later has the Corporation’s intellectual property rights invalidated or otherwise diminished, the Corporation’s competitors may be able to take advantage of the Corporation’s research and development efforts to develop competing products.

COVID-19

The Company’s business is subject to risks arising from a widespread outbreak of an illness or any other communicable disease, or any other public health crisis, such as the COVID-19 pandemic, which has impacted and could continue to impact the business.

In late 2019, a novel strain of COVID-19, also known as coronavirus, was reported in Wuhan, China. While initially the outbreak was largely concentrated in China, it has now spread to Israel and the United States, and infections have been reported globally. Many countries around the world, including in Israel, have significant governmental measures implemented to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on the conduct of business. The nature of the Company’s work in Israel is such that the Company is considered an essential service industry, and therefore, is generally able to

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continue all of its operations in Israel with little disruption. Initially, the Company implemented remote working and work-place protocols for its employees in accordance with Israeli government requirements. The Company has now returned to its regular work-place structure.

Risks Related to the Company’s Operations in Israel

The Company’s principal offices and customers are located in Israel and, therefore, the business, financial condition and results of operation may be adversely affected by political, economic and military instability in Israel.

The Company’s operational offices and customers are located in Israel. In addition, all of the Company’s employees and officers, and one of the directors, are residents of Israel. Accordingly, political, economic and military conditions in Israel may directly affect the business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the Company’s operations and results of operations.

During the Second Lebanon War of 2006, between Israel and Hezbollah, a militant Islamic movement, rockets were fired from Lebanon into Israel, including into the Haifa area, where the Company’s facility is located, causing casualties and major disruption of economic activities in northern Israel. An escalation in tension and violence between Israel and the militant Hamas movement (which controls the Gaza Strip) and other Palestinian Arab groups, culminated with Israel’s military campaign in Gaza in December 2008, in November 2012 and again in July and August 2014 in an endeavor to prevent continued rocket attacks against Israel’s southern towns, as well as other tension and violence between Israel and Palestinian Arab groups and individuals. It is unclear whether any negotiations that may occur between Israel and the Palestinian Authority will result in an agreement. In addition, Israel faces threats from more distant neighbors, in particular, Iran, an ally of Hezbollah and Hamas, and the militant group known as the Islamic State of Iraq and Syria.

Popular uprisings in various countries in the Middle East and North Africa are affecting the political stability of those countries. Such instability may lead to deterioration in the political and trade relationships that exist between the State of Israel and these countries. Furthermore, several countries, principally in the Middle East, restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in the region continue or intensify. Such restrictions may seriously limit the Company’s ability to sell its products to customers in those countries. Similarly, Israeli corporations are limited in conducting business with entities from several countries. Parties with whom the Company may do business could decline to travel to Israel during periods of heightened unrest or tension. In addition, the political and security situation in Israel may result in parties with whom the Company may have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. In addition, any hostilities involving Israel could have a material adverse effect on the Company’s facilities including the corporate office or on the facilities of the Company’s local suppliers, in which event all or a portion of the Company’s inventory may be damaged, and the ability to deliver products to customers could be materially adversely affected.

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Furthermore, the war and terrorism insurance the Company maintains may not be adequate to cover the losses associated with armed conflicts and terrorist attacks. Although the Israeli government in the past covered the reinstatement value of certain damages that were caused by terrorist attacks or acts of war, the Company cannot assure you that this government coverage will be maintained, or if maintained, will be sufficient to compensate the Company fully for damages incurred. Any losses or damages incurred by the Company could have a material adverse effect on the business.

Any hostilities involving Israel, terrorist activities or political instability in the region or the interruption or curtailment of trade between Israel and its present trading partners, or significant downturns in the economic or financial condition of Israel, could adversely affect the Company's operations and product development, cause the Company's revenues to decrease and adversely affect the share price.

The Company's operations may be disrupted as a result of the obligation of management or key personnel to perform military service.

The Company's operations could also be disrupted by the obligations of personnel to perform military service. Some of the Company's employees and independent contractors may be called upon to perform up to 54 days in each three-year period (and in the case of military officers, up to 84 days in each three-year period) of military reserve duty until they reach the age of 40 (and in some cases, depending on their specific military profession up to 45 or even 49 years of age) and, in certain emergency circumstances, may be called to immediate and unlimited active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists and it is possible that there will be similar large-scale military reserve duty call-ups in the future. The Company's operations could be disrupted by the absence of a significant number of employees related to military service, which could materially adversely affect the business and results of operations.

It may be difficult to enforce a judgment of a Canadian court against the Company, certain of the Company's officers and directors or the Israeli experts named in this Annual Report are in Israel, to assert Canadian securities laws claims in Israel or to serve process on certain of the officers and directors and these experts.

The Company is incorporated in Israel. Other than Alan Rootenberg, all of the executive officers and directors reside in Israel, and substantially all of the Company's assets and a substantial portion of the assets of these persons are located in Israel. Therefore, a judgment obtained against the Company, or any of these persons, including a judgment based on the civil liability provisions of Canadian securities laws, may not be collectible in Canada and may not be enforced by an Israeli court. It also may be difficult to effect service of process on these persons in Israel or to assert Canadian securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of Canadian securities laws on the grounds that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not Canadian law is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against the Company in Israel, one may not be able to collect any damages awarded by either a Canadian or foreign court.

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The Company may become subject to claims for payment of compensation for assigned service inventions by the Company's future employees, which could result in litigation and adversely affect the business.

Under the Israeli Patents Law, 5727-1967, or the Patents Law, inventions conceived by an employee during the scope of his or her employment are regarded as “service inventions” and are owned by the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. Section 134 of the Patents Law provides that if no agreement between an employer and an employee exists that prescribes whether, to what extent, and on what conditions the employee is entitled to remuneration for his or her service inventions, then such matters may, upon application by the employee, be decided by a government-appointed compensation and royalties committee established under the Patents Law, or the Committee. The Company does not presently have any employees. The Company will require all relevant future employees to sign agreements assigning all rights to intellectual property to the Company and to waive their economic rights to any intellectual property created in the scope of their employment with the Company. The Company cannot assure you that claims will not be brought against the Company by future employees demanding remuneration in consideration for assigned service inventions. If any such claims were filed, the Company could potentially be required to pay remuneration to the Company’s future employees for such assigned service inventions, or be forced to litigate such claims, which could negatively affect the business.

Part of our operations are conducted in Israel. Conditions in Israel, including the recent attack by Hamas and other terrorist organizations and Israel’s war against them, may affect our operations.

The Corporation’s headquarters and our operations are located in the State of Israel. In addition, certain of our key employees and officers, including our chief executive officer, are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business.

On October 7, 2023, an unprecedented attack was launched against Israel by terrorists from the Hamas terrorist organization that infiltrated Israel’s southern border from the Gaza Strip and in other areas within the state of Israel attacking civilians and military targets while simultaneously launching extensive rocket attacks on the Israeli population. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. In response, the Security Cabinet of the State of Israel declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. To date, the State of Israel continues to be at war with Hamas.

Since the war broke out on October 7, 2023, our operations have not been materially adversely affected by this situation, and we have not experienced material disruptions to our research and development activities. However, at this time, it is not possible to predict the intensity or duration of the war, nor can we predict how this war will ultimately affect Israel’s economy in general and we continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations.

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PROMOTERS

Mr. Ben Tsur Joseph may be considered to be a promoter of the Corporation within the meaning of applicable securities laws by reason of their initiative in founding, financing and establishing the business of the Corporation and, within the two years immediately preceding the date of this Prospectus, their active involvement in and contribution to the ongoing management and growth of the Corporation’s business.

Mr. Joseph controls 55.83% of the Common Shares.

No promoter of the Corporation has, within 10 years prior to the date of this Prospectus, been a director, chief executive officer, or chief financial officer of any person or company, that was subject to an order that was issued while the promoter was acting in such capacity, or was subject to an order that was issued after the promoter ceased to act in such capacity and which resulted from an event that occurred while the promoter was acting in such capacity.

No promoter of the Corporation is, as at the date of this Prospectus, or has been within the 10 years prior to the date of this Prospectus, a director or executive officer of any person or company that, while the promoter was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

No promoter of the Corporation has, within the 10 years prior to the date of this Prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the promoter.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS MATTERS

We are from time to time involved in legal proceedings of a nature considered normal to our business. We believe that none of the litigation in which we are currently involved, or have been involved since the beginning of the most recently completed financial year, individually or in the aggregate, is material to our consolidated financial condition or results of operations.

Legal Proceedings

There are no legal proceedings the Corporation is or was a party to, or that any of its property is or was the subject of, since the beginning of the most recently completed financial year for which financial statements of the Corporation are included in this Prospectus.

Regulatory Actions

There have not been any penalties or sanctions imposed against the Corporation by a court relating to provincial or territorial securities legislation or by a securities regulatory authority, nor have there been any other penalties or sanctions imposed by a court or regulatory body against the Corporation, and

the Corporation has not entered into any settlement agreements before a court relating to provincial or territorial securities legislation or with a securities regulatory authority.

INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as set forth in this Prospectus, including below, the Corporation is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of any director or executive officer, any person or company who owns of record, or is known by the Corporation to own beneficially, directly or indirectly, more than 10% of the Common Shares or any associate or affiliate of the foregoing persons or companies in any transaction since its incorporation or in any proposed transaction that has materially affected or is reasonably expected to materially affect the Corporation. See "Executive Compensation".

The Corporation has entered into the following agreements with related parties in A2Z:

(1) Lease Agreement – Pursuant to a lease agreement entered into as of January 18, 2021 the Corporation rents office space from A2Z Cust2Mate Solutions Corp., a wholly owned subsidiary of A2Z.

See "General Development of the Business – History" and "Management – Employees".

EXEMPTIONS FROM PROSPECTUS REQUIREMENTS

The Corporation has applied to the Ontario Securities Commission for exemptive relief from the operation of subsection 2.3(1.1) of National Instrument 41-101 General Prospectus Requirements ("NI 41-101"), which prohibits an issuer from filing a final prospectus more than 90 days after the date of the receipt for the preliminary prospectus or an amendment to the preliminary prospectus that relates to the final prospectus. The receipt issued for this Prospectus by the Ontario Securities Commission will evidence the granting of the exemption as contemplated under section 19.3 of NI 41-101.

AUDITORS, TRANSFER AGENT AND REGISTRAR

Auditors

The auditor for the Corporation is Lion Orlitzky & Co. at Bnei Brak, Israel.

Transfer Agent and Registrar

The transfer agent and registrar for the Corporation’s securities is Olympia Trust Company, at its principal office located in Calgary, Alberta.

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CONTRACTUAL RIGHTS OF RESCISSION OF SUBSCRIPTION RECEIPT HOLDERS

The Corporation has granted to each holder of a Subscription Receipt a contractual right of rescission of the prospectus-exempt transaction under which the Subscription Receipts were initially acquired. The contractual right of rescission provides that if a holder of a Subscription Receipt who acquires Common Shares upon fulfillment of the Restricted Share Release Conditions, or becomes, entitled under the securities legislation of a jurisdiction to the remedy of rescission because of this Prospectus or an amendment to this Prospectus containing a misrepresentation: (a) the holder is entitled to rescission of both the holder's exercise of its Subscription Receipt and the private placement transaction under which the Subscription Receipts were initially acquired, (b) the holder is entitled in connection with the rescission to a full refund of all consideration paid to the Corporation, as the case may be, on the acquisition of the Subscription Receipts, and (c) if the holder is a permitted assignee of the interest of the original Subscription Receipt subscriber, the holder is entitled to exercise the rights of rescission and refund as if the holder was the original subscriber.

MATERIAL CONTRACTS

Except for contracts made in the ordinary course of business, the following are the only material contracts entered into by the Corporation (i) since the beginning of the last financial year ending before the date hereof, or (ii) before the beginning of the last financial year ending before the date hereof and still currently in effect:

a) Mida Consulting Agreement dated January 1, 2024 among Mida Consulting and Investments Ltd. (Ben Tsur Joseph) and Shelfie, as amended on June 3, 2024 (see “Executive Compensation – Mida Consulting Agreement” above);

b) M&S Consulting Agreement dated April 1, 2022 among The M&S Group Inc. (Alan Rootenberg) and Shelfie (see “Executive Compensation – M&S Consulting Agreement” above);

c) Exclusive Distribution Agreement in Israel dated October 30, 2022, as amended on March 2, 2025, among Buchwalter Presentation and Storage Ltd. and Shelfie; pursuant to which Buchwalter will have exclusive distribution rights for the Company’s products in Israel until December 31, 2024. There are no costs/consequences to the Company if it has not finished developing its products by March 1, 2026. The distributor will not supply products manufactured by the company or any products similar to those manufactured by the company during the term of the exclusive distribution rights. If by the end of the initial period, the distributor has purchased products and services from the Company for an aggregate amount of at least $4,000,000, then the initial period will continue for a period of 3 additional years. This agreement with Buchwalter is an arm’s length third party contract. Buchwalter did not pay any consideration to obtain the distribution rights;

d) Framework Services Agreement dated November 29, 2022 among Manyone TLV Ltd. and Shelfie, pursuant to which Manyone shall provide design and project management services as detailed in individual work orders (SOWs). Specific details and requirements will be outlined in Statements of Work (“SOWs”). The initial SOW is attached as Exhibit A in the agreement.

The agreement is in effect until services are completed or terminated. Company may terminate with 14 days' notice; immediate termination for material breach if not cured within 7 days. To the extent Company terminated the agreement not for material breach, Company shall pay Manyone for services completed up to the termination date. All deliverables and IP created during the engagement are owned by the Company;

e) Transfer Agent Agreement dated November 19, 2024 among Olympia Trust Company and Shelfie; and

f) Escrow Agreement dated November 21, 2024 among Olympia Trust Company, Shelfie and Ben Tsur Joseph.

Copies of the above material contracts can be inspected at our head office during regular business hours for a period of 30 days after a final receipt is issued for this Prospectus and are also available electronically at www.sedarplus.ca.

EXPERTS

No person or company whose profession or business gives authority to a report, valuation, statement or opinion made by such person or company and who is named in this Prospectus as having prepared or certified a part of this Prospectus, or a report, valuation, statement or opinion described in this Prospectus, has received or shall receive a direct or indirect interest in any securities or other property of the Corporation or any associate or affiliate of the Corporation.

Lion Orlitzky & Co. has confirmed that it is independent of the Corporation within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario.

124

A-1

SCHEDULE A

FINANCIAL STATEMENTS

SHELFIE-TECH LTD

CONDENSED INTERIM FINANCIAL STATEMENTS

(Unaudited)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

(Expressed in United States Dollars)

SHELFIE-TECH LTD
CONDENSED INTERIM FINANCIAL STATEMENTS
(Unaudited)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
(Expressed in United States Dollars)

TABLE OF CONTENTS

Page

Condensed Interim Statements of Financial Position 3
Condensed Interim Statements of Comprehensive Loss 4
Condensed Interim Statements of Changes in Shareholders' Equity (Deficit) 5
Condensed Interim Statements of Cash Flows 6
Notes to Financial Statements 7-15

SHELFIE-TECH LTD
CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in United States Dollars)
(Unaudited)

	Note	September 30, 2024	December 31, 2023
ASSETS
Current Assets
Cash		$ 5,079	$ 9,616
VAT receivable		229	5,520
Prepaid expenses		92,725	90,749
Total Current Assets		98,033	105,885
Total assets		$ 98,033	$ 105,885
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$ 263,669	$ 273,831
Related parties	4	100,738	53,197
Accrued expenses		6,705	13,752
Total Current Liabilities		371,112	340,780
Total liabilities		371,112	340,780
Shareholders' Deficit
Share Capital	5	51	51
Additional paid in capital	5	2,200,790	2,158,439
Accumulated deficit		(2,473,920)	(2,393,385)
Total Shareholders' Deficit		(273,079)	(234,895)
Total Liabilities And Shareholders' Deficit		$ 98,033	$ 105,885

"Joseph Ben Tsur"

Director, Chief Executive officer
Joseph Ben Tsur

Date of approval of condensed interim financial statements: January 9, 2025.

The accompanying notes are an integral part of the condensed interim financial statements.

SHELFIE-TECH LTD
CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(Expressed in United States Dollars)
(Unaudited)

	Note	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Operating Expenses
Research and development costs	7	$ -	$ 198,179	$ 13,615	$ 438,639
General and administration costs	8	17,860	14,608	67,249	68,283
Sales and marketing expenses		-	-	2,000	32,676
Operating Loss		(17,860)	(212,787)	(82,864)	(539,598)
Other income (expenses)
Interest income		659	-	1,976	-
Foreign exchange gain (loss)		(3)	(1,126)	353	(5,946)
Total other income (expenses)		656	(1,126)	2,329	(5,946)
Loss and comprehensive loss for the period		$ (17,204)	$ (213,913)	$ (80,535)	$ (545,544)
Basic and fully diluted loss per share		$ (0.00)	$ (0.01)	$ (0.00)	$ (0.03)
Weighted average number of shares outstanding		20,065,548	19,617,485	19,971,570	19,597,620

The accompanying notes are an integral part of the condensed interim financial statements.

SHELFIE-TECH LTD

CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

(Expressed in United States Dollars)

(Unaudited)

	Ordinary share capital		Additional paid in capital	Accumulated deficit	Total Shareholders' equity (Deficit)
	Ordinary shares
	Number of shares	Amount
Balance -December 31, 2022	19,557,225	$ 49	$ 1,940,556	$ (1,804,241)	$ 136,364
Issuance of shares	60,256	1	60,234	-	60,235
Issuance of shares	237,897	1	157,649	-	157,650
Loss and comprehensive loss for the period	-	-	-	(545,544)	(545,544)
Balance - September 30, 2023	19,855,378	$ 51	$ 2,158,439	$ (2,349,785)	$ (191,295)
Balance -December 31, 2023	19,855,378	$ 51	$ 2,158,439	$ (2,393,385)	$ (234,895)
Issuance of shares (note 5c (i))	144,622	(*)	-	-	-
Issuance of shares (note 5c (ii))	65,548	(*)	42,351	-	42,351
Loss and comprehensive loss for the period	-	-	-	(80,535)	(80,535)
Balance - September 30, 2024	20,065,548	$ 51	$ 2,200,790	$ (2,473,920)	$ (273,079)

(*) Less than $1.00

The accompanying notes are an integral part of the condensed interim financial statements.

SHELFIE-TECH LTD
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)

	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Cash flows from operating activities
Net loss for the period	$ (80,535)	$ (545,544)
Adjustments for Interest income	(1,976)	-
Changes in non-cash working capital:
Decrease in VAT receivable	5,291	19,969
Decrease in in amounts owed to related parties	(4,708)	(27,514)
Increase (decrease) in accounts payable	(10,162)	132,744
Decrease in prepaid expenses	-	14,390
Decrease in accrued expenses	(7,047)	(22,158)
	(99,137)	(428,113)
Cash flows from financing activities
Amounts received from related parties	52,249	-
Proceeds from issuance of shares	42,351	217,885
	94,600	217,885
Decrease in cash	(4,537)	(210,228)
Cash, beginning of period	9,616	214,178
Cash, end of period	$ 5,079	$ 3,950

The accompanying notes are an integral part of the condensed interim financial statements.

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024
(Expressed in United States Dollars)
(Unaudited)

NOTE 1 - GENERAL

a. SHELFIE-TECH LTD ("Shelfie" or the "Company") was incorporated on November 18, 2021 in Israel. The Company’s robotic retail shelf monitoring system uses advanced machine learning and image processing algorithms to automatically optimize inventory management and retail store shelf filling while ensuring an enhanced customer experience. The Company's head office is located at 94, Yigal Alon St, Tel Aviv, Israel.

b. Since its inception, the Company had invested majority of its funds in development of the Shelfie platform resulting in accumulated losses amounting to approximately $2,474,000. The continuance of the Company’s operations is subject to continued financing from its shareholders and other investors. These circumstances raise a substantial doubt about the Company's ability to continue as a going concern. Management's plan in this regard include continued development, marketing and selling of its products and services as well as seeking additional financial arrangements. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining financing with terms acceptable by the Company. In the event that the Company is unable to increase revenue and achieve profitability or obtain additional financing, operations will need to be scaled back or discontinued. The financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

c. On October 7, 2023, an unprecedented attack was launched against Israel by terrorists from the Hamas terrorist organization that infiltrated Israel’s southern border from the Gaza Strip and in other areas within the state of Israel attacking civilians and military targets while simultaneously launching extensive rocket attacks on the Israeli population. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. In response, the Security Cabinet of the State of Israel declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. To date, the State of Israel continues to be at war with Hamas.

Since the war broke out on October 7, 2023, the Company’s operations have not been adversely affected by this situation, and we have not experienced disruptions to our activities. However, at this time, it is not possible to predict the intensity or duration of the war, nor can we predict how this war will ultimately affect Israel’s economy in general and we continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations.

d. Notes 3(c), 4(b) and 9 to these financial statements have been revised from the financial statements signed on December 4, 2024. None of these revisions had any material effect on the statements of financial position as of September 30, 2024 and December 31, 2023 or the statements of comprehensive loss for the three and nine month periods ended September 30,

2024 and 2023, and the statements of changes in shareholders' deficit and cash flows for the nine month periods ended September 20, 2024 and 2023.

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

The Company prepares its unaudited condensed interim financial statements in accordance with International Financial Reporting Standards (“IFRS”) using the accounting policies described herein as issued by International Accounting Standards Board (“IASB”) and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations. These unaudited condensed interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 Interim Financial Reporting. The unaudited condensed interim financial statements do not include all of the information required for annual financial statements and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023.

The policies applied in these condensed interim consolidated financial statements are based on IFRS effective as of September 30, 2024.

Basis of Presentation

These condensed interim financial statements are prepared on a going concern basis and have been presented in United States dollars which is the Company’s functional and reporting currency.

Basis of Measurement

These condensed interim financial statements have been prepared on a historical cost basis, except for certain financial instruments which have been measured at fair value.

Significant Accounting Judgments and Estimates

The significant accounting policies used in the preparation of these Interim Financial Statements are consistent with those described in the notes to the Company’s audited annual financial statements for the prior year end.

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)
NOTE 3 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Financial risk factors

The Company is exposed to a variety of financial risks such as: market risks (mainly currency risks), credit risks and liquidity risks. The Company’s overall risk management plan focuses on the unpredictability of financial markets and seeks to minimize the potential adverse effects on the Company’s financial performance.

Risk management is performed by the finance department according to the policy authorized by the board of directors.

a) Market risk - Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

The Company operates internationally and is exposed to foreign exchange risks due to exposure to foreign currencies. Foreign exchange risk arises from future commercial transactions, assets or liabilities denominated in foreign currency.

The Company’s policy to reduce the exposure to changes in exchange rates is based on maintaining, where possible, the balances of current monetary assets, according to the currency of the current liabilities.

As of September 30, 2024, if the Company’s functional currency (USD) had strengthened/ weakened by 5% against the ILS, with all other variables held constant, the loss for the period would decrease /increase by approximately $350.

b) Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the end of the reporting period.

Credit risks are treated at the Company level. Credit risks arise typically from cash and cash equivalents, trade receivables and other current assets.

No credit limits were exceeded during the reported periods and Company’s management does not expect any losses from non-performance of these parties.

c) Liquidity risk

Liquidity risk exists where the Company might encounter difficulties in meeting its financial obligations as they become due. The Company monitors its liquidity in order to ensure that sufficient liquid resources are available to allow it to meet its obligations.

Cash flow forecasting is performed by the Company's finance department. The finance department monitors rolling forecasts of the Company's liquidity requirements to ensure that it has sufficient cash to meet operational needs. The table below presents the maturity profile of the Company's financial liabilities based on contractual undiscounted payments:

	Carrying amount
Accounts payable	$ 263,669
Related parties	100,738
Accrued expenses	6,705
	$ 371,112

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)
NOTE 4 – TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Compensation to key management personnel

a. On February 1, 2022, a CEO services consulting agreement was signed between the Company and Mida Consulting and Investments Ltd (“Mida”), a company controlled by the CEO of the Company, pursuant to which the Company shall pay the CEO of the Company NIS 50,000 per month (approximately $13,500) (“2022 CEO Compensation Agreement”). From the month following the completion of an IPO, RTO or listing of the Company’s shares for trade on an international stock exchange or a similar transaction the fee shall increase to NIS 100,000 per month (approximately $27,000). On February 1, 2023, the Company and the CEO verbally agreed to terminate the agreement. A new agreement was signed on January 1, 2024, pursuant to which the Company shall pay the CEO $5,000 per month. On June 3, 2024 an amendment to the new agreement was signed between the Company and Mida, pursuant to which Mida, will not be paid any compensation until such time as Shelfie is a publicly listed company and has raised an additional $1,000,000 post such listing.

b. On February 1, 2022, the Company entered into a rental agreement with A2Z Cust2Mate Solutions Corp, (“A2Z”), a company controlled by the CEO of the Company (“Rental Agreement”). The Rental Agreement expired on January 31, 2023 and was renewed for a further 12 months. On February 1, 2024, the Rental Agreement was renewed for 11 months to December 31, 2024. On January 1, 2025, Rental Agreement was renewed for 6 months, through to June 30, 2025. The Company’s base rent is ILS2,000 per month ($590) The Company has elected to not recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and for leases of low-value assets.

c. On April 1, 2022, the Company and the CFO of the Company entered into a CFO services consulting agreement pursuant to which the CFO shall receive $2,000 per month. From the month following the completion of an IPO, RTO or listing of the Company’s shares for trade on an international stock exchange or similar transaction, the amount shall increase to $3,000 per month.

d. On November 1, 2022, the Company and the President of the Company entered into an agreement pursuant to which the President of the Company shall receive NIS 50,000 per month (approximately $13,500). The Company also paid the president one month fee as a signing bonus. On February 1, 2023, the Company and the President verbally agreed to terminate the agreement. A formal agreement to this effect was signed on May 22, 2024 in which it was re confirmed by the Company and the president of the termination as of February 1, 2023.

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)
NOTE 4 – TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued)
Compensation to key management personnel (continued)

e. The compensation to key management personnel for consulting services they have provided to the Company is as follows:

	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
CEO	$ -	$ -	$ -	$ 14,388
CFO	6,000	6,000	18,000	18,000
President	-	-	-	14,328
	$ 6,000	$ 6,000	$ 18,000	$ 46,716

f. Balances with related parties:

	September 30, 2024	December 31, 2023
Amounts owed to the CFO	$ 42,000	$ 24,000
Amounts owed to a company controlled by the CEO	58,738	29,197
	$ 100,738	$ 53,197

a. Composition of share capital:

	September 30, 2024		December 31, 2023
	Authorized	Issued and outstanding	Authorized	Issued and outstanding
	Number of shares		Number of shares
Ordinary shares of NIS 0.0000075 par value each ("Shares")	1,600,000,000	20,065,548	1,600,000,000	19,855,378

On July 27, 2023, the Company effected a 1-for-5,294 share split of its issued and outstanding shares and on April 15, 2024, the Company effected a 1-for-3.96901 share consolidation of its issued and outstanding shares. All share amounts have been retroactively restated for all periods presented. See note 9.a.

b. Rights attached to shares

Voting rights at the general meeting, right to dividend, rights upon liquidation and right to nominate the directors in the Company.

c. Transactions during the period:

i. On April 10, 2024, the Company issued 144,622 shares to certain existing shareholders of the Company to compensate them for financing rounds that took place after their investment, at a lower valuation. The fair value of the issuance is $93,441.

ii. On June 18, 2024, the Company and A2Z agreed to convert $42,351 of amounts owing by the Company to A2Z, to shares and issued 65,548 Shares.

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)

NOTE 6 – CAPITAL MANAGEMENT

The Company's capital comprises share capital, share based payment reserve, warrant reserve, and accumulated other comprehensive loss. The Company manages its capital structure, and makes adjustments to it, based on the funds available to the Company in order to support the Company’s business activities. The Board of Directors does not establish quantitative return on capital criteria for management; it relies on the expertise of the Company's management to sustain future development of the business.

The intellectual property in which the Company currently has an interest is in the development stage; as such, the Company is dependent on external financing to fund its activities. In order to carry out the planned research and development and pay for administrative costs, the Company intends to raise additional amounts as needed (Note 1).

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

NOTE 7 – RESEARCH AND DEVELOPMENT COSTS

	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Hardware engineering- subcontractors	$ -	$ 177,372	$ -	$ 345,677
Professional and consulting fees	-	17,031	-	55,593
Patent	-	-	11,752	-
Software development- subcontractors	-	3,776	1,863	37,369
	$ -	$ 198,179	$ 13,615	$ 438,639

NOTE 8 – GENERAL AND ADMINISTRATION COSTS

	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Professional and consulting fees	$ 16,139	$ 11,487	$ 60,537	$ 58,138
Office rental and other related expenses	1,721	3,121	6,712	10,145
	$ 17,860	$ 14,608	$ 67,249	$ 68,283

SHELFIE-TECH LTD
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended September 30, 2024 and 2023
(Expressed in United States Dollars)
(Unaudited)

NOTE 9 – SUBSEQUENT EVENTS

a. On October 8, 2024, the Company effected a 1-for-1.0004 share split of its issued and outstanding shares.

b. During November and December 2024, the Company received $1,183,030 from investors to be held by the Company (“Restricted Funds”). The Restricted Funds are in respect of subscription receipts to issue 1,792,469 Shares at $0.66 per share (“Underlying Shares”). The Restricted Funds will be released by the Company upon (a) the receipt by the Company of a final receipt from the Ontario Securities Commission (or such other securities regulator as the Company selects as its principal regulator) for a final long form prospectus qualifying the Underlying Shares; and (b) the Company being conditionally approved for listing on the CSE.

c. During December 2024, the Company received $600,000 in respect of a private placement and issued 909,092 Shares, representing a price per share of $0.66.

SHELFIE-TECH LTD
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the three and nine month periods ended September 30, 2024

Management's Discussion and Analysis

The following is management’s discussion and analysis of the activities, results of operations and financial condition of SHELFIE-TECH LTD (“Shelfie”, “Shelfie Tech”, “we”, “our”, “us”, or the “Company”) for the nine month period ended September 30, 2024, which has been prepared on the basis of information available up until January 9, 2025. This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the Company’s financial statements for the nine months ended September 30, 2024, together with the notes thereto.

All monetary amounts are reported in US dollars and in accordance with IFRS unless otherwise noted. This MD&A is dated January 9, 2025.

Forward-Looking Statements

This MD&A contains "forward-looking information" within the meaning of applicable Canadian securities legislation ("forward-looking information"). Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth below and as detailed under RISKS AND UNCERTAINTIES in this MD&A.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein is given as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

Description of Business

Corporate Structure
Name and Incorporation

SHELFIE-TECH LTD was incorporated on November 18, 2021 in Israel. The Company’s robotic retail shelf monitoring system uses advanced machine learning and image processing algorithms to automatically optimize inventory management and retail store shelf filling while ensuring an enhanced customer experience. The Company's head office is located at 94, Yigal Alon St, Tel Aviv, Israel.

Significant developments during the period

effected a 1-for-1.0004 share split of its issued and outstanding shares. All common share and per common share amounts have been retroactively restated for all periods presented.

During 2023, the Company developed the first generation of the system and characterized the specific technology of the system for the first generation of product. In addition, during 2023 the Company worked on building the first generation of its product for demonstrations and exhibitions, and the Company has participated in two exhibitions in which it presented the system's capabilities.

During November and 2024, the Company received $1,183,030 from investors to be held by the Company ("Restricted Funds"). The Restricted Funds are in respect of subscription receipts to issue 1,792,469 Shares at $0.66 per share ("Underlying Shares"). The Restricted Funds will be released by the Company upon (a) the receipt by the Company of a final receipt from the Ontario Securities Commission (or such other securities regulator as the Company selects as its principal regulator) for a final long form prospectus qualifying the Underlying Shares; and (b) the Company being conditionally approved for listing on the CSE.

During December 2024, the Company received $600,000 in respect of a private placement and issued 909,092 Shares, representing a price per share of $0.66.

Business of Shelfie

Shelfie is a technological company focused on providing retail automation solutions, in particular for large grocery stores and supermarkets.

Using innovative patented technology, the Company's robotic retail shelf monitoring system uses advanced machine learning and image processing algorithms to automatically optimize inventory management while ensuring an enhanced customer experience. In addition, the Company's software application ("App") ensures that supermarket employees do shelf filling efficiently and on-time.

The total global addressable market for Shelfie is estimated at approximately $27 billion per year, based on the intended subscription revenue model.

Product & Technology

Shelfie Tech's robotic retail shelf monitoring system is designed to take the guesswork out of inventory management by improving visibility into the retail shelf supply.
Shelfie Tech's innovative solution consists of a digital image capturing system mounted on a shelf that automatically captures an image of all products on the shelf, a transportation system that moves the camera along the shelf, and a centralized management system.
The artificial intelligence ("AI") and computer vision-based system is equipped with advanced machine learning and image processing algorithms that analyze the images, determine the number of units on the shelf, and calculate the required number of items to be restocked. The innovative system can deliver item-level alerts in real-time to in-store personnel, pinpointing the exact products running low, allowing for rapid remediation and an enhanced customer experience.
The key features include:
Suitable for multiple shelf types - unit can be mounted on a variety of shelving units, including those with fixed unmovable shelves or shelves that can be rearranged and adjusted.
Flexible image capture options - unit can be configured to capture images at a defined time interval or a specified distance, ensuring complete coverage of the scanned shelf.
Flexible product identification options - solution can capture an image of the barcode or use AI and computer vision to identify the products and count the number of units on each shelf.

Unobtrusive operation - system recognizes if a shopper is standing in front of or in the vicinity of a shelf and can halt operation accordingly. This ensures inventory accuracy and does not interfere with the shopping experience.

Selected Financial Information

The following financial data prepared in accordance with IFRS in US dollars is presented for the nine-month periods ended September 30, 2024, and September 30, 2023.

	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Operating Expenses
Research and development costs	$ -	$ 198,179	$ 13,615	$ 438,639
General and administration costs	17,860	14,608	67,249	68,283
Sales and marketing expenses	-	-	2,000	32,676
Operating Loss	(17,860)	(212,787)	(82,864)	(539,598)
Other income (expenses)
Interest income	659	-	1,976	-
Foreign exchange gain (loss)	(3)	(1,126)	353	(5,946)
Total other income (expenses)	656	(1,126)	2,329	(5,946)
Loss and comprehensive loss for the period	$ (17,204)	$ (213,913)	$ (80,535)	$ (545,544)
Basic and fully diluted loss per share	$ (0.00)	$ (0.01)	$ (0.00)	$ (0.03)
Weighted average number of shares outstanding	20,065,548	19,617,485	19,971,570	19,597,620

Nine-month period ended September 30, 2024, compared to the nine-month period ended September 30, 2023

Research and development costs

For the nine months ended September 30, 2024, research and development costs amounted to $13,615 (nine months ended September 30, 2023 - $438,639). The expenses consist of patent work - $11,752 and software development and subcontractors - $1,863 (nine months ended September 30, 2023 - hardware engineering and subcontractors - $345,677, professional and consulting fees - $55,593, patent work - $nil and software development- subcontractors - $37,369). The decrease in 2024 is a result of insufficient funding to continue its operations.

General and administrative expenses

For the nine months ended September 30, 2024, general and administrative expenses amounted to $67,249 (nine months ended September 30, 2023 - $68,283). General and administrative expenses consist of professional and consulting fees - $60,537 and office rental and other related office expenses - $6,712 (nine months ended September 30, 2023 - professional and consulting fees - $58,138 and office rental and other related expenses - $10,145).

Sales and marketing expenses

For the nine months ended September 30, 2024, sales and marketing expenses amounted to $2,000 (nine months ended September 30, 2023 - $32,676). During 2023, the Company developed the first generation of the system and characterized the specific technology of the system for the first generation. In addition, during 2023 the Company worked on building the first generation for pilots and exhibitions and the Company has participated in two exhibitions in which it presented the system's capabilities. The decrease in 2024 is a result of insufficient funding to continue its operations.

Net losses

The Company reported a loss and comprehensive loss for the nine months ended September 30, 2024 of $80,535 (nine months ended September 30, 2023 - $545,544).

Three-month period ended September 30, 2024, compared to the three-month period ended September 30, 2023

Research and development costs

For the three months ended September 30, 2024, research and development costs amounted to $nil (three months ended September 30, 2023 - $198,179). The decrease in 2024 is a result of a pause in development until a financing is completed.

General and administrative expenses

For the three months ended September 30, 2024, general and administrative expenses amounted to $17,860 (three months ended September 30, 2023 - $14,608). General and administrative expenses consist of professional and consulting fees - $16,139 and office rental and other related office expenses - $1,721 (three months ended September 30, 2023 – professional and consulting fees – $11,487 and office rental and other related expenses - $3,121).

Sales and marketing expenses

For the three months ended September 30, 2024, sales and marketing expenses amounted to $nil (three months ended September 30, 2023 - $nil). During 2023, the Company developed the first generation of the system and characterized the specific technology of the system for the first generation. In addition, during 2023 the Company worked on building the first generation for pilots and exhibitions and the Company has participated in two exhibitions in which it presented the system's capabilities. The decrease in 2024 is a result of insufficient funding to continue its operations.

Net loss

The Company reported a loss and comprehensive loss for the three months ended September 30, 2024 of $17,204 (three months ended September 30, 2023 loss of - $213,913).

Inflation

During the nine months ended September 30, 2024 and the nine months ended September 30, 2023, inflation has not had a material impact on the Company's operations.

Summary of Quarterly Results

The Company does not have quarterly results for the three and nine months ended September 30, 2024 as it is not a public issuer.

Liquidity

Liquidity is a measure of a company’s ability to meet potential cash requirements. The Company has historically met its capital requirements through the issuance of common shares.

Financial position

As at September 30, 2024, the Company had total assets of $98,033 and a net deficit position of $273,079. This compares with total assets of $105,885 and a net deficit position of $234,895 as at December 31, 2023.

As at September 30, 2024, the Company had a working capital deficit of $273,079 compared to a working capital deficit of $234,895 as at December 31, 2023. The Company had cash on hand of $5,079 as at September 30, 2024, compared with $9,616 as at December 31, 2023. Included in working capital, is $92,725 being amounts that the Company advanced to a service provider in return for consultancy services in connection with the Company’s IPO process. As of September 30, 2024, the Company has not received these services. The balance owed by the service provider to the Company accrues interest at 3% per annum. To the extent that the service provider shall not render the services by December 31, 2024, the service provider shall be obligated to return the consultancy fee. During the fourth quarter of 2024, the prepaid expense was charged to the statement of comprehensive loss as the service was received during this period.

As of September 30, 2024, the Company has an accumulated deficit of $2,473,920 ($2,393,385 as of December 31, 2023).

Nine months ended September 30, 2024

During the nine months ended September 30, 2024 the Company’s overall position of cash decreased by $4,537. This decrease can be attributed to the following activity:

Cash flows used in operating activities were $99,137. The cash was used to pay research and development and general administrative expenditures.
Cash flow from financing activities for the nine months ended September 30, 2024 of $94,600 was the result of money received from a related party and issuance of shares to a related party.

Nine months ended September 30, 2023

During the nine months ended September 30, 2023 the Company’s overall position of cash decreased by $210,228. This decrease can be attributed to the following activity:

Cash flows used in operating activities were $428,113. The cash was used to pay research and development and general administrative expenditures.
Cash flow from financing activities for the nine months ended September 30, 2023 of $217,885 was the result of a private placement and money received from a related party.

Capital Resources

As of September 30, 2024, the Company has a working capital deficit of $273,079 (December 31, 2023 – working capital of $234,895). However, as of the date of this report, the Company has cash and cash equivalents of approximately $1,606,000 and approximately $1,231,000 in working capital. The Company’s expected monthly cash burn rate is equal to approximately $50,000 based on its intention to allocate approximately $600,000 on the completion of its research and development, selling and marking expenses and general and administrative costs, including costs relating to going public in Canada.

The Company cannot offer any assurance that expenses will not exceed management's expectations. The Company may require additional funds after 12 months and may be dependent upon its ability to secure equity and/or debt financing, the availability of which cannot be assured.

Commitments

On October 30, 2022, the Company entered into an agreement with Buchwalter Presentation and Storage Ltd. ("Buchwalter") under which Buchwalter, a leading supplier of products (including shelving) and technologies to supermarkets in Israel will serve as exclusive representatives of the Company in Israel. Buchwalter will have exclusive distribution rights for the Company's products in Israel until December 31, 2024 ("Initial Period"). On March 2, 2025, the parties agreed to amend the agreement such that the Initial Period will be extended until March 1, 2026.

If by the end of the initial period, the distributor has purchased products and services from the Company for an aggregate amount of at least $4,000,000, then the initial period will continue for a period of 3 additional years.

Disclosure of Outstanding Share Data

As of the date of this report, the Company has 20,974,640 ordinary shares outstanding (December 31, 2023 – 19,855,378). There are no warrants or options outstanding at this date.

Management of Capital

The Company's capital comprises share capital and accumulated other comprehensive loss. The Company manages its capital structure, and makes adjustments to it, based on the funds available to the Company in order to support the Company's business activities. The Board of Directors does not establish quantitative return on capital criteria for management; it relies on the expertise of the Company's management to sustain future development of the business.

The intellectual property in which the Company currently has an interest is in the development stage; as such, the Company may be dependent on external financing to fund its activities beyond the next 18 months. During November and December 2024, the Company raised $1.8 million which will be used to carry out the planned research and development and pay for administrative costs for at least the next 18 months.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

Off-Balance Sheet arrangements

See "Commitments" above.

Transactions with Related Parties

The following are the expenses incurred with related parties for the nine months ended September 30, 2024 and for the nine months ended September 30, 2023, and the balances owing as of September 30, 2024 and December 31, 2023:

	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
CEO	$ -	$ -	$ -	$ 14,388
CFO	6,000	6,000	18,000	18,000
President	-	-	-	14,328
	$ 6,000	$ 6,000	$ 18,000	$ 46,716

Balances with related parties:

	September 30,	December 31,
	2024	2023
Amounts owed to the CFO	$ 42,000	$ 24,000
Amounts owed to a company controlled by the CEO	58,738	29,197
	$ 100,738	$ 53,197

On February 1, 2022, a CEO services consulting agreement was signed between the Company and Mida Consulting and Investments Ltd ("Mida"), a company controlled by the CEO, pursuant to which the Company shall pay the CEO NIS 50,000 per month (approximately $13,500) ("2022 CEO Compensation Agreement"). From the month following the completion of an IPO, RTO or listing of the Company's shares for trade on an international stock exchange or a similar transaction the fee shall increase to NIS 100,000 per month (approximately $27,000). On February 1, 2023, the Company and the CEO verbally agreed to terminate the agreement. A new agreement was signed on January 1, 2024, pursuant to which the Company shall pay the CEO $5,000 per month. On June 3, 2024, an amendment to the new agreement was signed between the Company and Mida, pursuant to which the CEO, will not be paid any compensation until such time as Shelfie is a publicly listed company and has raised an additional $1,000,000 post such listing.

On February 1, 2022, the Company entered into a rental agreement with A2Z Cust2Mate Solutions Corp, (“A2Z”), a company controlled by the CEO of the Company (“Rental Agreement”). The Rental Agreement expired on January 31, 2023 and was renewed for a further 12 months. On February 1, 2024, the Rental Agreement was renewed for 11 months to December 31, 2024. On January 1, 2025, Rental Agreement was renewed for 6 months, through to June 30, 2025. The Company’s base rent is ILS2,000 per month ($590). The Company has elected to not recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and for leases of low-value assets.

On April 1, 2022, the Company and the CFO entered into a CFO services consulting agreement pursuant to which the CFO shall receive $2,000 per month. From the month following the completion of an IPO, RTO or listing of the Company’s shares for trade on an international stock exchange or similar transaction, the fee shall be increased to $3,000 per month.

On November 1, 2022, the Company and the president entered into an agreement pursuant to which the president shall receive NIS 50,000 per month (approximately $13,500). The Company also paid the president one month fee as a signing bonus. On February 1, 2023, the Company and the President verbally agreed to terminate the agreement. A formal agreement to this effect was signed on May 22, 2024, in which it was re-confirmed by the Company and the president of the termination as of February 1, 2023.

Critical Accounting Policies and Estimates

Our results of operation and financial condition are based on our consolidated financial statements, which are presented in accordance with IFRS. Certain accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at that time. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. The significant accounting policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Provisions are recognized when: a) the Company has a present obligation (legal or constructive) as a result of a past event; and b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

A contingent liability is not recognized in the case where no reliable estimate can be made; however, disclosure is required unless the possibility of an outflow of resources embodying economic benefits is remote. By its nature, a contingent liability will only be resolved when one or more future events occur or fail to occur. The assessment of a contingent liability inherently involves the exercise of significant judgment and estimates of the outcome of future events.

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

There were no changes to the Company’s internal controls over financial reporting during the nine months ended September 30, 2024, which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Risks and Uncertainties

Credit risk

The Company manages credit risk, in respect of cash, by holding them at major Israeli financial institutions in accordance with the Company’s investment policy. The Company places its cash with high credit quality Israeli financial institutions. Concentration of credit risk exists with respect to the Company’s cash. The Company’s exposure as of September 30, 2024 was $98,033 which consisted of $5,079 in cash held in bank accounts, and $229 in VAT tax and $92,725 in prepaid expenses. (December 31, 2023 - $105,885, which consisted of $9,616 in

cash held in bank accounts, $5,520 in VAT tax and $90,749 in prepaid expenses). During the fourth quarter of 2024, the prepaid expense was charged to the statement of comprehensive loss as the service was received during this period.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in obtaining funds to meet current obligations and future commitments. The Company's approach to managing liquidity risk is to forecast cash requirements to provide reasonable assurance that it will have sufficient funds to meet its liabilities when due. As of September 30, 2024, the Company had cash of $5,079 to settle current liabilities in the amount of $371,112 (December 31, 2023 – cash of $9,616 to settle current liabilities in the amount of $340,780). The tables below present the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

As of September 30, 2024:

	Carrying amount
Accounts payable	$ 263,669
Related parties	100,738
Accrued expenses	6,705
	$ 371,112

As of December 31, 2023:

	Carrying amount
Accounts payable	$ 273,831
Related parties	53,197
Accrued expenses	13,752
	$ 340,780

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of two types of risk: interest rate risk, and foreign currency risk.

(i) Interest rate risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its cash equivalents.

(ii) Foreign currency risk

The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. The Company operates in Israel and most of the Company’s expenditures are currently incurred in USD. However, the Company also has expenditures in NIS. The Company has not hedged its exposure to currency fluctuations. As of September 30, 2024, if the Company’s functional currency (USD) had strengthened/ weakened by 5% against the ILS, with all other variables held constant, the loss for the period would decrease /increase by approximately $350.

Development Stage Company

Shelfie has only a limited history upon which one can evaluate its business and prospects as its technologies are still at an early stage of development and thus Shelfie has limited experience and has not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area. The likelihood of the success of the Company must be considered in light of the risks inherent in, and the difficulties, costs and complications associated with the early growth stages of a business enterprise, as well as with the development and marketing of new products.

Future Capital Needs

During November and December 2024, the Company raised $1.8 million which will be used to carry out the planned research and development and pay for administrative costs for at least the next 18 months. The Company may not be able to fully implement and execute its long-term business strategy without additional financing. There can be no assurance that such additional financing will be available, and if available, there can be no assurance that the cost of obtaining such financing will be on favorable or reasonable commercial terms or that it will not result in substantial dilution to its shareholders. If additional funds are raised through the issuance of equity or equity-linked debt securities, the percentage ownership in Shelly of the shareholders will be reduced, and such securities may have rights, preferences, or privileges senior to or equal to those of the Company's shares held by the current shareholders, or any other securities outstanding on the date thereof.

If adequate funds in the future are not available to satisfy ongoing capital requirements, the Company may be required to curtail its operations significantly or to obtain funds, if available, through arrangements with strategic partners or others that may require the Company to relinquish material rights to certain technologies or potential markets. There is no certainty that financing will be available in amounts or on acceptable terms, if at all.

Any failure to raise additional funds on favorable terms is likely to have a material adverse effect on the Company's liquidity and financial condition.

Dependence on Key Personnel

The Company's future success depends on its ability to retain key employees and attract, train, retain and successfully integrate new talent into its management team. Shelly is dependent on the services of its senior management team. The loss of any of the members of the Company's senior management team could have a material adverse effect on the Company's results of operations, business and prospects. The Company's future success also depends, to a significant extent, on its ability to attract and retain talented personnel. Recruiting and retaining talented personnel, particularly those with the expertise required for the Company's business is vital to the Company's success and may prove difficult.

Applicability of Patents and Proprietary Technology

Competitors may have filed patent applications, or hold issued patents, relating to products or processes competitive with those Shelly has developed or will in future develop. The Company's patent applications for a product may not be approved or approved as desired. The patents of the Company's competitors may impair its ability to do business in a particular area. Others may independently develop similar products or duplicate any of the Company's unpatented products or technologies. The Company's success will depend, in part, on its ability in the future to obtain patents, protect trade secrets and other proprietary information and operate without infringing the proprietary rights of others. Patent protection is uncertain and involves many complex legal, scientific and technical questions. The degree of legal protection afforded under patents is unclear. As a result, the scope of patents issued to Shelly, or their partners may not successfully prevent third parties from developing similar or competitive products.

Shelly has and will continue to enter into confidentiality agreements with its employees, suppliers and vendors. However, these confidentiality agreements may be breached, and the Company may not have adequate remedies for such breaches. Others may independently develop substantially equivalent proprietary information without infringing upon any proprietary technology belonging to the Company. Third parties may otherwise gain access to the Company's proprietary information and adopt it in a competitive manner.

In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued. Also, Shelly faces the following intellectual property risks: (i) some or all patent applications may not result in the issuance of a patent; (ii) patents issued may not provide the holder with any competitive advantages; (iii) patents could be challenged by third parties; (iv) the patents of others could impede our ability to do business; (v) competitors may find ways to design around our patented products; and (vi) competitors could independently develop products which duplicate our products.

Economic and military instability in Israel and in the Middle East

The Company’s operational offices are located in Israel. In addition, a majority of the Company’s employees, officers and directors are residents of Israel. Accordingly, political, economic and military conditions in the Middle East may directly affect the business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the Company’s operations and results of operations.

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign against Hamas and these terrorist organizations in parallel continued rocket and terror attacks. As a result of the events in October 2023, the Israeli government declared that the country was at war and the Israeli military began to call-up reservists for active duty. To date, none of our members of management nor significant number of employees is in active military reserve duty. Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations.

The Company is continuing with its operations in Israel. The Company continues to assess the effects of the state of war on its financial statements and business. The intensity and duration of Israel’s current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on our business and operations and on Israel’s economy in general. If the war extends for a long period of time or expands to other fronts, such as Lebanon, Syria and the West Bank, our operations may be adversely affected.

Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of trade between Israel and its trading partners, or any political instability in the region could adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face.

Continued hostilities between Israel and its neighbors and any future armed conflict, terrorist activity or political instability in the region could adversely affect our operations in Israel and adversely affect the market price of our ordinary shares. An escalation of tensions or violence might result in a significant downturn in the economic or financial condition of Israel, which could have a material adverse effect on our operations in Israel and our business.

Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could adversely affect our results of operations.

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business.

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Docusign Envelope ID: 8DCD2A26-21D1-4507-9928-D64762EB4D10

SHELFIE-TECH LTD

FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Docusign Envelope ID: 8DCD2A26-21D1-4507-9928-D64762EB4D10

SHELFIE-TECH LTD

FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Page

REPORT OF INDEPENDENT AUDITORS 3-6

FINANCIAL STATEMENTS IN U.S. DOLLARS:

Statements of financial position 7
Statements of comprehensive loss 8
Statements of changes in shareholders' equity (deficit) 9
Statements of cash flows 10
Notes to financial statements 11-27

MOORE Israel

LION, ORLITZKY & CO.

Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

SHELFIE-TECH LTD

Opinion

We have audited the financial statements of SHELFIE-TECH LTD (the Company), which comprise the statements of financial position as of December 31, 2023 and 2022, and the statements of comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the financial statements, including a summary of accounting policies.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended December 31, 2023 and 2022 in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Israel, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1.b in the financial statements, which indicates that the Company has invested the majority of its funds in the development of Shelfie platform resulting in accumulated losses amounting to approximately $2,393,000. As stated in Note 1.b, the continuance of the Company’s operations is subject to continued financing from its shareholders and other investors. These conditions, along with other matters as set forth in Note 1.b, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

An independent member firm of Moore global network limited - members in principal cities throughout the world

Main: 3 HaYarkon St., LYFE (B) Towers, Bnei Brak 5120125, Israel Tel: 972-3-6155155, Fax. 972-3-6155150 E mail: [email protected] www.lionorl.co.il Jerusalem: 8 Hartom St., Har Hotzvim Jerusalem 9777508, Israel Tel. 972-77-2717600, Fax. 972-2-6537364 E mail: [email protected]

MOORE Israel

LION, ORLITZKY & CO.

Certified Public Accountants

Emphasis of Matter – Restatement of financial statements

We draw attention to Note 1.d to the financial statements, which describes that the financial statements for the year ended 31 December, 2022 on which we originally reported on September 28, 2023, have been restated and the matter that gives rise to the restatement of the financial statements.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Except for the matter described in the Material Uncertainty Related to Going Concern section of our report, we have determined that there are no other key audit matters to communicate in our report.

Other Matter

As described in note 1.e to the financial statements, notes 7(b) 12 and 13(e, f) have been revised from the financial statements signed on December 4, 2024. None of these revisions had any material effect on the statements of financial position as of December 31, 2023 and 2022 or the statements of comprehensive loss, changes in shareholders’ deficit and cash flows for the years then ended.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

MOORE Israel

LION, ORLITZKY & CO.

Certified Public Accountants

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

MOORE Israel

LION, ORLITZKY & CO.

Certified Public Accountants

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Yael Hilman Rasmovich.

Lion Orlitzky & Co.

Certified Public Accountants (Israel)

Bnei Brak, Israel

December 4, 2024, except as to the revisions referred to in ‘Other matter’ paragraph, which are as of April 10, 2025.

SHELFIE-TECH LTD

STATEMENTS OF FINANCIAL POSITION

Expressed in U.S dollars

	Note	December 31, 2023	December 31, 2022
ASSETS
Current Assets
Cash		$ 9,616	$ 214,178
VAT receivable		5,520	35,497
Prepaid expenses	5	90,749	102,212
Total Current Assets		105,885	351,887
Total assets		$ 105,885	$ 351,887
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable		$ 273,831	$ 142,314
Related parties	7	53,197	45,514
Accrued expenses		13,752	27,695
Total Current Liabilities		340,780	215,523
Shareholders' Equity (Deficit)
Share Capital	6	51	49
Additional paid in capital	6	2,158,439	1,940,556
Accumulated deficit		(2,393,385)	(1,804,241)
Total Shareholders' Equity (Deficit)		(234,895)	136,364
Total Liabilities And Shareholders' Equity (Deficit)		$ 105,885	$ 351,887

() The comparative information has been restated as discussed in note 1.e.
(*) Reclassification

"Ben Tsur Joseph"

Director, Chief Executive officer

Ben Tsur Joseph

Date of approval of financial statements: December 4, 2024.

The accompanying notes are an integral part of the financial statements.

Docusign Envelope ID: 8DCD2A26-21D1-4507-9928-D64762EB4D10

SHELFIE-TECH LTD

STATEMENTS OF COMPREHENSIVE LOSS

Expressed in U.S dollars

	Note	Year ended December 31, 2023	Year ended December 31, 2022
Operating Expenses
Research and development costs	10	$ 458,292	$ 776,786 *
General and administration costs	11	95,059	272,479 *
Sales and marketing expenses		32,676	-
Operating Loss		(586,027)	(1,049,265)
Interest expenses
Interest income		2,927	-
Foreign exchange loss		(6,044)	(50,643)
Total other expenses		(3,117)	(50,643)
Loss and comprehensive loss for the year		$ (589,144)	$ (1,099,908) *
Basic and fully diluted loss per share **		$ (0.03)	$ (0.06)
Weighted average number of shares outstanding		19,662,590	19,004,155

() The comparative information has been restated as discussed in note 1.e.
(*) See note 6.a.

The accompanying notes are an integral part of the financial statements.

SHELFIE-TECH LTD

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

For the years ended December 31, 2023 and 2022

Expressed in U.S. dollars

	Ordinary share capital		Additional paid in capital		Receipt on account of shares		Accumulated deficit	Total Shareholders' equity (Deficit)
	Ordinary shares **
	Number of shares	Amount
Balance - December 31, 2021	17,069,244	$	41	$	626,999	$	594,827	$(704,333)
Issuance of shares	2,263,598		5		1,086,012		(594,827)	-
Issuance of shares	224,383		3		227,545		-	-
Loss and comprehensive loss for the year	-		-		-		-	(1,099,908)
Balance - December 31, 2022	19,557,225	$	49	$	1,940,556	$	-	$(1,804,241)
Issuance of shares in respect of a private placement (Note 6.c)	60,256		1		60,234		-	-
Issuance of shares to a related party (Note 6.c)	237,897		1		157,649		-	-
Loss and comprehensive loss for the year	-		-		-		-	(589,144)
Balance - December 31, 2023	19,855,378	$	51	$	2,158,439	$	-	$(2,393,385)

() The comparative information has been restated as discussed in note 1.e.
(*) See note 6.a.

The accompanying notes are an integral part of the financial statements.

Docusign Envelope ID: 8DCD2A26-21D1-4507-9928-D64762EB4D10

SHELFIE-TECH LTD

STATEMENTS OF CASH FLOWS

For the years ended December 31, 2023 and 2022

Expressed in U.S. dollars

	Year ended December 31,	Year ended December 31,
	2023	2022
Cash flows from operating activities
Net loss for the year	$ (589,144)	$ (1,099,908) *
Adjustments for Interest income	(2,927)	-
Changes in non-cash working capital:
Decrease (increase) in VAT receivable	29,977	(27,979)
Increase (decrease) in amounts owed to related parties	(19,888)	45,514
Increase in accounts payable	131,517	91,533
Decrease (increase) in prepaid expenses	14,390	(102,212) *
Decrease in accrued expenses	(13,943)	(6,382)
	(450,018)	(1,099,434)
Cash flows from financing activities
Amounts received from related parties	27,571	-
Proceeds from issuance of shares	217,885	718,738
	245,456	718,738
Decrease in cash	(204,562)	(380,696)
Cash, beginning of year	214,178	594,874
Cash, end of year	$ 9,616	$ 214,178

(*) The comparative information has been restated as discussed in note 1.e.

The accompanying notes are an integral part of the financial statements.

Docusign Envelope ID: 8DCD2A26-21D1-4507-9928-D64762EB4D10

SHELFIE-TECH LTD

NOTES TO FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Expressed in U.S. dollars

NOTE 1 - GENERAL

b. Since its inception, the Company has invested majority of its funds in development of the Shelfie platform, resulting in accumulated losses amounting to approximately $2,393,000. The continuance of the Company’s operations is subject to continued financing from its shareholders and other investors. These circumstances raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard include continued development, marketing and selling of its products and services as well as seeking additional financial arrangements. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining financing with terms acceptable by the Company. In the event that the Company is unable to increase revenue and achieve profitability or obtain additional financing, operations will need to be scaled back or discontinued. The financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 1 – GENERAL (continued)

d. Prior year restatement

For the years ended December 31, 2022 and 2021, the Company previously recognized as an expense the assumed fair value of certain services, provided by its controlling shareholder without remuneration, with a corresponding credit to shareholders’ equity. The Company has reconsidered this accounting treatment and concluded it should not have been applied.

Accordingly, these financial statements have been corrected retroactively.

The 2022 financial information has been updated to correct for this error, as follow:

2022	As previously reported	Correction of error	As restated
Research and development costs	784,605	7,819	776,786
General and administration costs	280,299	7,820	272,479
Loss and comprehensive loss for the year	(1,115,547)	(15,639)	(1,099,908)
Basic and fully diluted loss per share	(0.059)	(0.001)	(0.058)
Capital account- transaction with a related party	(39,585)	(39,585)	-
Accumulated deficit	(1,843,826)	(39,585)	(1,804,241)
2022	As previously reported	Correction of error	As restated
---	---	---	---
Statement of cash flow
Cash flows from operating activities	(1,011,612)	87,822	(1,099,434)
Cash flows from investing activities	(87,822)	(87,822)	-

Furthermore, as a result of the correction to the 2022 financial statements as outlined in the table above, certain 2021 financial information has been restated to reflect the correction, as follow:

2021	As previously reported	Correction of error	As restated
Capital account- transaction with a related party	(23,946)	(23,946)	-
Accumulated deficit	(728,279)	(23,946)	(704,333)

e. Notes 7(b), 12 and 13(e, f) to these financial statements have been revised from the financial statements signed on December 4, 2024. None of these revisions had any material effect on the statements of financial position as of December 31, 2023 and 2022 or the statements of comprehensive loss, changes in shareholders’ deficit and cash flows for the years then ended.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 2 - ACCOUNTING POLICIES

a. Basis for preparation

1) The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee (IFRIC).

2) The accounting policies set out below have been applied consistently. In connection with the presentation of these financial statements, it is noted as follows:

a) The significant accounting policies described below have been applied consistently during the period.

b) The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements. Actual results may differ materially from estimates and assumptions used by management (see note j).

3) The financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss, which are stated at their fair value. The financial statements are presented in U.S. dollar, which is also the Company’s functional currency. In addition, the financial statements have been prepared using the accrual basis of accounting except for cash flow information. The preparation of financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgement of complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

b. Functional currency

Management concluded that the currency of the primary economic environment in which the Company conducts its operations is the U.S. dollar (hereafter - “dollar” or “$”). Accordingly, the Company uses the dollar as its functional and reporting currency.

Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions reflected in the statement of operations, the transaction date exchange rates are used. Depreciation and other changes deriving from non-monetary items are based on historical exchange rates. The resulting transaction gains or losses are recorded as financial income or expenses, as appropriate.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 2 - ACCOUNTING POLICIES (continued)

c. Cash

Cash includes cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

d. Financial instruments

1) Classification

The Company classifies its financial assets at amortized cost. The classification is determined, among other things, in accordance with the purpose for which the financial assets were acquired. The basis of classification depends on the Company’s business model and the contractual cash flow characteristics of the financial asset.

Financial assets at amortized cost are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and their contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These assets are classified as current assets, except for maturities of more than 12 months after the balance sheet date, which are classified as non-current assets. The Company's financial assets at amortized cost are included "other receivables" and "cash" in the statements of financial position.

2) Recognition and measurement

Financial assets at amortized cost, which are initially measured at fair value, including any transaction costs, are measured in subsequent periods at amortized cost using the effective interest method. Trade receivables that do not have a significant financing component are initially measured at their transaction price.

3) Impairment of financial assets - financial assets measured at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost. At each reporting date, the Company assesses whether the credit risk on a financial asset has increased significantly since initial recognition.

If the financial asset is determined to have low credit risk at the reporting date, the Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition.

4) Financial liabilities

Trade accounts payable, other accounts payable and accrued expenses, which are initially recognized at fair value and subsequently carried at amortized cost using the effective interest method.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 2 - ACCOUNTING POLICIES (continued)

e. Current and Deferred taxes

Current taxes are calculated based on the tax laws that have been enacted or substantively enacted at the balance sheet date, in countries in which the Company operate and generate taxable income.

The Company recognizes deferred taxes using the liability method, for temporary differences between the amounts of assets and liabilities included in the financial statements, and the amounts for tax purposes. Deferred taxes are not recognized, if the temporary differences arise at the initial recognition of the asset or liability which at the time of the transaction has no effect on profit or loss, whether for accounting or tax reporting. The amount of deferred taxes is determined using the tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax assets is realized or the deferred tax liabilities will be settled.

Deferred tax assets are recognized for temporary differences that are tax deductible, up to the amount of the differences that are expected to be utilized in the future, against taxable income.

No deferred tax assets have been recorded in the Company’s books and records with respect to accumulated losses since it is not probable that the Company will be able to utilize such losses in the foreseeable future against taxable income.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 2 - ACCOUNTING POLICIES (continued)

f. Research and development

Research costs incurred in connection with the Company’s products are expensed as incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognized if all of the following conditions are fulfilled:

Technological feasibility exists for completing development of the intangible asset so that it will be available for use or sale.
It is management’s intention to complete development of the intangible asset for use or sale.
The Company has the ability to use or sell the intangible asset.
It is probable that the intangible asset will generate future economic benefits, including existence of a market for the output of the intangible asset or the intangible asset itself or, if the intangible asset is to be used internally, the usefulness of the intangible asset.
Adequate technical, financial and other resources are available to complete development of the intangible asset, as well as the use or sale thereof.
The Company has the ability to reliably measure the expenditure attributable to the intangible asset during its development.

Other development costs that do not meet the foregoing conditions are charged to profit or loss as incurred. Development costs previously expensed are not recognized as an asset in subsequent periods.

As of December 31, 2023, the Company has not capitalized development costs since it does not meet the conditions for development costs capitalization.

g. Basic and diluted loss per share

Loss per share is based on the loss that is attributed to the shareholders holding ordinary shares divided by the weighted average number of ordinary shares in issue during the period. For purposes of the calculation of the diluted loss per share, the Company adjusts the loss that is attributed to the holders of the Company’s ordinary, and the weighted average number of ordinary shares in issue, to assume conversion of all of the dilutive potential shares. The potential shares are taken into account only if their effect is dilutive. Diluted amounts are not presented when the effect of the computations is anti-dilutive. Accordingly, at present, there is no difference in the amounts presented for basic and diluted loss per share.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 2 - ACCOUNTING POLICIES (continued)

h. Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are included in equity as a deduction from the proceeds.

i. Significant Accounting Judgments and Estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which, by their nature, are uncertain.

The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and also in future periods when the revision affects both current and future periods.

The critical judgments and significant estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are:

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.
Management expenses the costs directly associated with research and development activities, unless the development asset recognition criteria is met. Indirect costs are estimated using management’s calculation of the amount of the activity that is deemed to be associated with research and development.
In order to assess whether it is appropriate for the company to continue as a going concern, management is required to apply judgment and make estimates with respect to future cash flow projections. In arriving at this judgment, there were a number of assumptions and estimates involved in calculating these future cash flow projections. This includes making estimates regarding the timing and amounts of future expenditures and the ability and timing to raising additional financing.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 3 - CHANGES IN ACCOUNTING POLICIES - INITIAL ADDITION OF NEW FINANCIAL REPORTING AND ACCOUNTING STANDARDS AND AMENDMENTS TO EXISTING FINANCIAL REPORTING AND ACCOUNTING STANDARDS

The following amendments are effective for the period beginning 1 January 2023:

Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements)

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2. The amendments aim to make accounting policy disclosures more informative by replacing the requirement to disclose 'significant accounting policies' with 'material accounting policy information'. The amendments also provide guidance under what circumstance, the accounting policy information is likely to be considered material and therefore requiring disclosure.

These amendments have no effect on the measurement or presentation of any items in the Consolidated financial statements of the Company but affect the disclosure of accounting policies of the Company.

Definition of Accounting Estimates (Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors)

The amendments to IAS 8, which added the definition of accounting estimates, clarify that the effects of a change in an input or measurement technique are changes in accounting estimates, unless resulting from the correction of prior period errors. These amendments clarify how entities make the distinction between changes in accounting estimates, changes in accounting policy and prior period errors.

These amendments had no effect on the consolidated financial statements of the Company.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes)

In May 2021, the IASB issued amendments to IAS 12, which clarify whether the initial recognition exemption applies to certain transactions that result in both an asset and a liability being recognized simultaneously (e.g. a lease in the scope of IFRS 16). The amendments introduce an additional criterion for the initial recognition exemption, whereby the exemption does not apply to the initial recognition of an asset or liability which at the time of the transaction, gives rise to equal taxable and deductible temporary differences.

These amendments had no effect on the annual consolidated financial statements of the Company.

International Tax Reform – Pillar Two Model Rules (Amendment to IAS 12 Income Taxes)

The goal of the framework is to reduce the shifting of profit from one jurisdiction to another in order to reduce global tax obligations in corporate structures. In March 2022, the OECD released detailed technical guidance on Pillar Two of the rules.

Stakeholders raised concerns with the IASB about the potential implications on income tax accounting, especially accounting for deferred taxes, arising from the Pillar Two model rules. The IASB issued the final Amendments (the Amendments) International Tax Reform – Pillar Two Model Rules, in response to stakeholder concerns on 23 May 2023.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 3 - CHANGES IN ACCOUNTING POLICIES - INITIAL ADDITION OF NEW FINANCIAL REPORTING AND ACCOUNTING STANDARDS AND AMENDMENTS TO EXISTING FINANCIAL REPORTING AND ACCOUNTING STANDARDS (continued)

The Amendments introduce a mandatory exception to entities from the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two model rules. The exception is effective immediately and retrospectively. The Amendments also provide for additional disclosure requirements with respect to an entity’s exposure to Pillar Two income taxes.

Management has determined that the Company is not within the scope of OECD’s Pillar Two Model Rules and the exception to the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two income taxes is not applicable to the Company.

The following amendments are effective for the period beginning 1 January 2024:

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);
Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and

The following amendments are effective for the period beginning 1 January 2025:

Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates)

The Company is currently assessing the impact of these new accounting standards and amendments.

The Company does not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities, as the conversion feature in its convertible debt instruments is classified as an equity instrument and therefore, does not affect the classification of its convertible debt as a non-current liability. The Company does not expect any other standards issued by the IASB, but are yet to be effective, to have a material impact on the Company.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Financial risk factors

Risk management is performed by the finance department according to the policy authorized by the board of directors.

a) Market risk - Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

The functional currency of the Company is the United States dollar, (“USD”) however, some of the Company's assets and liabilities are financial instruments denominated in ILS.

The Company’s policy to reduce its exposure to changes in exchange rates is based on maintaining, where possible, the balances of current monetary assets, according to the currency of the current liabilities.

As of December 31, 2023, if the Company’s functional currency (USD) had strengthened/ weakened by 5% against the ILS, with all other variables held constant, the loss for the period would decrease /increase by approximately $1,600.

b) Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the end of the reporting period.

Credit risks are treated at the Company level. Credit risks arise typically from cash and cash equivalents, trade receivables and other current assets.

No credit limits were exceeded during the reported periods and Company’s management does not expect any losses from non-performance of these parties.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)

c) Liquidity risk

Cash flow forecasting is performed by the Company’s finance department. The finance department monitors rolling forecasts of the Company’s liquidity requirements to ensure that it has sufficient cash to meet operational needs. The table below presents the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

	Carrying amount
Accounts payable	$ 273,831
Related parties	53,197
Accrued expenses	13,752
	$ 340,780

NOTE 5 – PREPAID EXPENSES

During 2022, the Company advanced $87,822 to a service provider in return for consultancy services in connection with the Company’s IPO process. As of December 31, 2023, the Company has not received these services. The balance owed by the service provider to the Company accrues interest at 3% per annum. The services will be performed by December 31, 2024. To the extent that the service provider does not render the services by December 31, 2024, the service provider shall be obligated to return the consultancy fee.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 6 - SHARE CAPITAL

a. Composition of share capital:

	December 31, 2023		December 31, 2022
	Authorized	Issued and outstanding	Authorized	Issued and outstanding
	Number of shares		Number of shares
Ordinary shares of NIS 0.0000075 par value each ("Shares")	1,600,000,000	19,855,378	1,600,000,000	19,557,225

On July 27, 2023, the Company effected a 1-for-5,294 share split of its issued and outstanding shares. All share amounts have been retroactively restated for all periods presented. See note 13.c.

b. Rights attached to shares

Voting rights at the general meeting, right to dividend, rights upon liquidation and right to nominate the directors in the Company.

c. Issuance of ordinary shares

(i) From January 1, 2023 to January 25, 2023, the Company received $60,235 in respect of a private placement and issued 60,256 shares.

(ii) On September 30, 2023, the Company issued 237,897 shares to a related party in the amount of $157,650.

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 7- TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Compensation to key management personnel

b. On February 1, 2022, the Company entered into a rental agreement with A2Z Cust2Mate Solutions Corp, (“A2Z”), a company controlled by the CEO of the Company (“Rental Agreement”). The Rental Agreement expired on January 31, 2023 and was renewed for a further 12 months. On February 1, 2024, the Rental Agreement was renewed for 11 months to December 31, 2024. On January 1, 2025, Rental Agreement was renewed for 6 months, through to June 30, 2025. The Company’s base rent is ILS2,000 per month ($590). The Company has elected to not recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and for leases of low-value assets.

d. On November 1, 2022, the Company and the President of the Company entered into an agreement pursuant to which the President of the Company shall receive NIS 50,000 per month (approximately $13,500). The Company also paid the President one month fee as a signing bonus. On February 1, 2023, the Company and the President verbally agreed to terminate the agreement. A formal agreement to this effect was signed on May 22, 2024 in which it was re-confirmed by the Company and the president of the termination as of February 1, 2023.

e. The compensation to key management personnel for consulting services they have provided to the Company is as follows:

	Year ended December 31, 2023	Year ended December 31, 2022
CEO	$ 14,388	$ 162,866
CFO	24,000	16,000
President	14,168	43,270
	$ 52,556	$ 222,136

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 7 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued)

Compensation to key management personnel (continued)

f. Balances with related parties:

	December 31, 2023	December 31, 2022
Amounts owed to the CEO	$ -	$ 16,624
Amounts owed to the CFO	24,000	8,000
Amounts owed to the President	-	14,209
Amounts owed to a company controlled by the CEO	29,197	6,681
	$ 53,197	$ 45,514

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

3) NOTE 8 - TAXES ON INCOME

a. Corporate taxation in Israel

The Company is taxed under the laws of the State of Israel at a corporate tax rate of 23%.

b. Tax assessment

The Company has not received any tax assessment since its incorporation.

c. Carry forward tax losses

As of December 31, 2023, carry forward losses of the Company amounted to $135,503. Carry forward losses may be deductible against future taxable income. Management currently believes that since the Company had incurred losses since its inception, it is more likely than not that the deferred tax regarding that carry forward losses will not be realized in the foreseeable future.

d. Taxes on income included in the Statements of Loss and Other Comprehensive Loss for the periods presented:

The following is reconciliation between the "theoretical" tax, which would apply to the Company if all of its income were taxed at the regular rate applicable to the Company in Israel and the amount of tax reflected in the Statements of Loss for the reported period: The reconciliation between the tax expense, assuming that all the income, expenses, gains and losses in profit or loss were taxed at the statutory tax rate and the taxes on income recorded in profit or loss is as follows:

	Year ended December 31, 2023	Year ended December 31, 2022
Loss before taxes on income	$ (589,144)	$ (1,099,908)
Statutory tax rate in Israel	23%	23%
Tax benefit computed at the statutory tax rate	(135,503)	(252,979)
Increase in taxes on income resulting from the following:
Loss for tax purposes	175,530	183,943
Research and development- amortize over 3 years for tax purposes	(39,354)	69,035
Other differences	(673)	-
Actual taxes on income	$ -	$ -

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 9 – CAPITAL MANAGEMENT

The Company's capital comprises share capital, share based payment reserve, warrant reserve, and accumulated other comprehensive loss. The Company manages its capital structure, and makes adjustments to it, based on the funds available to the Company in order to support the Company's business activities. The Board of Directors does not establish quantitative return on capital criteria for management; it relies on the expertise of the Company's management to sustain future development of the business.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

NOTE 10 – RESEARCH AND DEVELOPMENT COSTS

	Year ended December 31, 2023	Year ended December 31, 2022
Hardware engineering- subcontractors	$ 355,575	$ 447,073
Professional and consulting fees (Note 7)	48,562	278,872
Patent	-	11,187
Software development- subcontractors	54,155	39,654
	$ 458,292	$ 776,786

NOTE 11 – GENERAL AND ADMINISTRATION COSTS

	Year ended December 31, 2023	Year ended December 31, 2022
Professional and consulting fees (Note 7)	$ 79,030	$ 221,156
Office rental and other related expenses	16,029	18,724
Other	-	32,599
	$ 95,059	$ 272,479

SHELFIE-TECH LTD
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
Expressed in U.S. dollars

NOTE 12 – COMMITMENTS

On October 30, 2022, the Company entered into an agreement with Buchwalter Presentation and Storage Ltd. (“Buchwalter”) under which Buchwalter, a leading supplier of products (including shelving) and technologies to supermarkets in Israel will serve as exclusive representatives of the Company in Israel. Buchwalter will have exclusive distribution rights for the Company’s products in Israel until December 31, 2024 (the “Initial Period”). On March 2, 2025, the parties agreed to amend the agreement such that the Initial Period will be extended until March 1, 2026.

If by the end of the initial period, the distributor will purchase products and services from the company for an aggregate amount of at least $4,000,000, then the initial period will continue for a period of three additional years.

NOTE 13 – SUBSEQUENT EVENTS

a. On January 1, 2024, a new agreement was signed, pursuant to which the Company shall pay the CEO of the Company $5,000 per month. On June 3, 2024, an amendment to the new agreement was signed between the Company and Mida, pursuant to which Mida will not be paid any compensation until such time as Shelfie is a publicly listed company and has raised an additional $1,000,000 post such listing.

b. On April 10, 2024, the Company issued 144,622 shares to certain existing shareholders of the Company to compensate them for financing rounds that took place after their investment, at a lower valuation. The fair value of the issuance is $93,441.

c. On April 15, 2024, the Company effected a 1-for-3.96901 share consolidation of its issued and outstanding shares and on October 8, 2024, the Company effected a 1-for-1.0004 share split of its issued and outstanding shares. All share amounts have been retroactively restated for all periods presented.

d. On June 18, 2024, the Company and A2Z agreed to convert $42,351 of the funds transferred to the Company by A2Z and issued 65,548 Shares.

e. During November and December, the Company received $1,183,030 from investors to be held by the Company (“Restricted Funds”). The Restricted Funds are in respect of subscription receipts to issue 1,792,469 Shares at $0.66 per share (“Underlying Shares”). The Restricted Funds will be released by the Company upon (a) the receipt by the Company of a final receipt from the Ontario Securities Commission (or such other securities regulator as the Company selects as its principal regulator) for a final long form prospectus qualifying the Underlying Shares; and (b) the Company being conditionally approved for listing on the CSE.

f. During December 2024, the Company received $600,000 in respect of a private placement and issued 909,092 Shares, representing a price per share of $0.66.

SHELFIE-TECH LTD
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the year ended December 31, 2023

Management's Discussion and Analysis

The following is management’s discussion and analysis of the activities, results of operations and financial condition of SHELFIE-TECH LTD (“Shelfie”, “Shelfie Tech”, “we”, “our”, “us”, or the “Company”) for the year ended December 31, 2023, which has been prepared on the basis of information available up until January 9, 2025. This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the Company’s financial statements for the year ended December 31, 2023, together with the notes thereto.

All monetary amounts are reported in US dollars and in accordance with IFRS unless otherwise noted. This MD&A is dated January 9, 2025.

Forward-Looking Statements

Description of Business

Corporate Structure
Name and Incorporation

Significant developments during the year

On July 27, 2023, Shelfie effected a 1 for 5,294 share split of its common shares, on April 15, 2024, Shelfie completed a share consolidation of its Common Shares on a 3.96901:1 basis and on October 8, 2024, the Company effected a 1-for-1.0004 share split of its issued and outstanding shares. All common share and per common share amounts have been retroactively restated for all periods presented.

During 2023, the Company developed the first generation of the system and characterized the specific technology of the system for the first generation of product. In addition, during 2023 the Company worked on building the first generation of its product for pilots and exhibitions, and the Company has participated in two exhibitions in which it presented the system's capabilities.

During November and December 2024, the Company received $1,183,030 from investors to be held by the Company (“Restricted Funds”). The Restricted Funds are in respect of subscription receipts to issue 1,792,469 Shares at $0.66 per share (the “Underlying Shares”). The Restricted Funds will be released by the Company upon (a) the receipt by the Company of a final receipt from the Ontario Securities Commission (or such other securities regulator as the Company selects as its principal regulator) for a final long form prospectus qualifying the Underlying Shares; and (b) the Company being conditionally approved for listing on the CSE.

During December 2024, the Company received $600,000 in respect of a private placement and issued 909,092 Shares, representing a price per share of $0.66.

Business of Shelfie

Shelfie is a technological company focused on providing retail automation solutions, in particular for large grocery stores and supermarkets.
The total global addressable market for Shelfie is estimated at approximately $27 billion per year, based on the intended subscription revenue model.

Using innovative patented technology, the Company’s robotic retail shelf monitoring system uses advanced machine learning and image processing algorithms to automatically optimize inventory management while ensuring an enhanced customer experience. In addition, the Company’s software application (“App”) ensures that supermarket employees do shelf filling efficiently and on-time.

The total global addressable market for Shelfie is estimated at approximately $27 billion per year, based on the intended subscription revenue model.

Product & Technology

Shelfie Tech’s robotic retail shelf monitoring system is designed to take the guesswork out of inventory management by improving visibility into the retail shelf supply.
Shelfie Tech’s innovative solution consists of a digital image capturing system mounted on a shelf that automatically captures an image of all products on the shelf, a transportation system that moves the camera along the shelf, and a centralized management system.
The artificial intelligence (“AI”) and computer vision-based system is equipped with advanced machine learning and image processing algorithms that analyze the images, determine the number of units on the shelf, and calculate the required number of items to be restocked. The innovative system can deliver item-level alerts in real-time to in-store personnel, pinpointing the exact products running low, allowing for rapid remediation and an enhanced customer experience.

The key features include:

Suitable for multiple shelf types - unit can be mounted on a variety of shelving units, including those with fixed unmovable shelves or shelves that can be rearranged and adjusted.
Flexible image capture options - unit can be configured to capture images at a defined time interval or a specified distance, ensuring complete coverage of the scanned shelf.
Flexible product identification options - solution can capture an image of the barcode or use AI and computer vision to identify the products and count the number of units on each shelf.
Unobtrusive operation - system recognizes if a shopper is standing in front of or in the vicinity of a shelf and can halt operation accordingly. This ensures inventory accuracy and does not interfere with the shopping experience.

Selected Financial Information

The following financial data prepared in accordance with IFRS in US dollars is presented for the years ended December 31, 2023, and December 31, 2022.

	Year ended December 31, 2023	Year ended December 31, 2022
Operating Expenses
Research and development costs	$ 458,292	$ 776,786
General and administration costs	95,059	272,479
Sales and marketing expenses	32,676	-
Operating Loss	(586,027)	(1,049,265)
Interest expenses
Interest income	2,927	-
Foreign exchange loss	(6,044)	(50,643)
Total other expenses	(3,117)	(50,643)
Loss and comprehensive loss for the year	$ (589,144)	$ (1,099,908)
Basic and fully diluted loss per share **	$ (0.03)	$ (0.06)

Year ended December 31, 2023, compared to the year ended December 31, 2022

Research and development costs

For the year ended December 31, 2023, research and development costs amounted to $458,292 year ended December 31, 2022 - $776,786. The expenses consist of professional and consulting fees - $48,562, hardware engineering and subcontractors - $355,575, patent work - $nil, software development and subcontractors - $54,155 (year ended December 31, 2022 - professional and consulting fees - $278,872, hardware engineering and subcontractors - $447,073, patent work - $11,187, and software development-subcontractors - $39,654). Based on the research made by the Company during 2022 and the results of such research, the Company built the first generation of the system and characterized the specific technology of the system for the first generation.

General and administrative expenses

For the year ended December 31, 2023, general and administrative expenses amounted to $95,059 (year ended December 31, 2022 - $272,479). General and administrative expenses consist of professional and consulting fees - $79,030, office rental and other related office expenses - $16,029, other miscellaneous expenses - $nil (year ended December 31, 2022 – professional and consulting fees – $221,156, office rental and other related expenses - $18,724, and other miscellaneous expenses - $32,599).

Sales and marketing expenses

For the year ended December 31, 2023, Sales and marketing expenses amounted to $32,676 (year ended December 31, 2022 - $nil). During 2023, the Company developed the first generation of the system and characterized the specific technology of the system for the first generation. In addition, during 2023 the Company worked on building the first generation for pilots and exhibitions, and the Company has participated in two exhibitions in which it presented the system's capabilities.

Net losses

The Company reported a net and comprehensive loss for the year ended December 31, 2023 of $589,144 (year ended December 31, 2022 - $1,099,908).

Inflation

During the year ended December 31, 2023 and the year ended December 31, 2022, inflation has not had a material impact on the Company's operations.

Summary of Quarterly Results

The Company does not have quarterly results for the year ended December 31, 2023 as it is not a public issuer.

Liquidity

Liquidity is a measure of a company's ability to meet potential cash requirements. The Company has historically met its capital requirements through the issuance of common shares.

Financial position

As at December 31, 2023, the Company had total assets of $105,885 and a net deficit position of $234,895. This compares with total assets of $351,887 and a net equity position of $136,364 as at December 31, 2022. The Company had current liabilities of $340,780 as at December 31, 2023, as compared with $215,523 as at December 31, 2022.

As at December 31, 2023, the Company had working capital deficit of $234,895 compared to working capital of $136,364 as at December 31, 2022. The Company had cash on hand of $9,616 as at December 31, 2023, compared with $214,178 as at December 31, 2022. Included in working capital, is $90,749 being amounts that the Company advanced to a service provider in return for consultancy services in connection with the Company's IPO process. As of December 31, 2023, the Company has not received these services. The balance owed by the service provider to the Company accrues interest at 3% per annum. The services will be performed by December 31, 2024. To the extent that the service provider shall not render the services by December 31, 2024, the service provider shall be obligated to return the consultancy fee.

As of December 31, 2023, the Company has an accumulated deficit of $2,393,385 ($1,804,241 as of December 31, 2022).

Year ended December 31, 2023

During the year ended December 31, 2023 the Company's overall position of cash decreased by $204,562. This decrease can be attributed to the following activity:

Cash flows used in operating activities were $450,018. The cash was used to pay research and development and general administrative expenditures.

Cash flow from financing activities for the year ended December 31, 2023 of $245,456 was the result of a private placement, issuance of shares to a related party and money received from a related party.

Year months ended December 31, 2022

During the year ended December 31, 2022 the Company’s overall position of cash decreased by $380,696. This decrease can be attributed to the following activity:

Cash flows used in operating activities were $1,099,434. The cash was used to pay research and development and general administrative expenditures.

Cash flow from financing activities for the year ended December 31, 2022 of $718,738 was the result of a private placement and amounts owned from related parties.

Capital Resources

As of December 31, 2023, the Company has a working capital deficit of $234,895 (December 31, 2022 – working capital of $136,364). However, as of the date of this report, the Company has cash and cash equivalents of approximately $1,606,000 and approximately $1,231,000 in working capital. The Company’s expected monthly cash burn rate is equal to approximately $50,000 based on its intention to allocate approximately $600,000 on the completion of its research and development, selling and marking expenses and general and administrative costs, including costs relating to going public in Canada.

Commitments

On October 30, 2022, the Company entered into an agreement with Buchwalter Presentation and Storage Ltd. (“Buchwalter”) under which Buchwalter, a leading supplier of products (including shelving) and technologies to supermarkets in Israel will serve as exclusive representatives of the Company in Israel. Buchwalter will have exclusive distribution rights for the Company’s products in Israel until December 31, 2024 ("Initial Period"). On March 2, 2025, the parties agreed to amend the agreement such that the Initial Period will be extended until March 1, 2026.

Disclosure of Outstanding Share Data

As of the date of this report, the Company has 20,974,640 ordinary shares outstanding (December 31, 2023 – 19,855,378). There are no warrants or options outstanding at this date.

Management of Capital

The Company's capital comprises share capital and accumulated other comprehensive loss. The Company manages its capital structure, and makes adjustments to it, based on the funds available to the Company in order to support the Company’s business activities. The Board of Directors does not establish quantitative return on capital criteria for management; it relies on the expertise of the Company's management to sustain future development of the business.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

Off-Balance Sheet arrangements

See "Commitments" above.

Transactions with Related Parties

The following are the expenses incurred with related parties for the year ended December 31, 2023 and for the year ended December 31, 2022, and the balances owing as of December 31, 2023 and December 31, 2022:

	December 31,		December 31,
	2023		2022
CEO	$	14,388	$	162,866
CFO		24,000		16,000
President		14,168		43,270
	$	52,556	$	222,136

Balances with related parties:

	December 31,		December 31,
	2023		2022
Amounts owed to the CEO	$	-	$	16,624
Amounts owed to the CFO		24,000		8,000
Amounts owed to the President		-		14,209
Amounts owed to a company controlled by the CEO		29,197		6,681
	$	53,197	$	45,514

On February 1, 2022, a CEO services consulting agreement was signed between the Company and Mida Consulting and Investments Ltd ("Mida"), a company controlled by the CEO of the Company, pursuant to which the Company shall pay the CEO of the Company NIS 50,000 per month (approximately $13,500) ("2022 CEO Compensation Agreement"). From the month following the completion of an IPO, RTO or listing of the Company's shares for trade on an international stock exchange or a similar transaction the fee shall increase to NIS 100,000 per month (approximately $27,000). On February 1, 2023, the Company and the CEO verbally agreed to terminate the agreement. A new agreement was signed on January 1, 2024, pursuant to which the Company shall pay the CEO $5,000 per month. On June 3, 2024 an amendment to the new agreement was signed between the Company and Mida, pursuant to which the CEO will not be paid any compensation until such time as Shelfie is a publicly listed company and has raised an additional $1,000,000 post such listing.

On February 1, 2022, the Company entered into a rental agreement with A2Z Cust2Mate Solutions Corp, ("A2Z"), a company controlled by the CEO of the Company ("Rental Agreement"). The Rental Agreement expired on January 31, 2023 and was renewed for a further 12 months. On February 1, 2024, the Rental

Agreement was renewed for 11 months to December 31, 2024. On January 1, 2025, Rental Agreement was renewed for 6 months, through to June 30, 2025. The Company’s base rent is ILS2,000 per month ($590). The Company has elected to not recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and for leases of low-value assets.

On April 1, 2022, the Company and the CFO of the Company entered into a CFO services consulting agreement pursuant to which the CFO shall receive $2,000 per month. From the month following the completion of an IPO, RTO or listing of the Company’s shares for trade on an international stock exchange or similar transaction, the amount shall be increased to $3,000 per month.

On November 1, 2022, the Company and the President of the Company entered into an agreement pursuant to which the President of the Company shall receive NIS 50,000 per month (approximately $13,500). The Company also paid the president one month fee as a signing bonus. On February 1, 2023, the Company and the President verbally agreed to terminate the agreement. A formal agreement to this effect was signed on May 22, 2024 in which it was re-confirmed by the Company and the president of the termination as of February 1, 2023.

Critical Accounting Policies and Estimates

Provisions are recognized when: a) the Company has a present obligation (legal or constructive) as a result of a past event; and b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

There were no changes to the Company’s internal controls over financial reporting during the year ended December 31, 2023, which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Risks and Uncertainties

Credit risk

The Company manages credit risk, in respect of cash, by holding them at major Israeli financial institutions in accordance with the Company’s investment policy. The Company places its cash with high credit quality Israeli financial institutions. Concentration of credit risk exists with respect to the Company’s cash. The Company’s exposure as of December 31, 2023 was $105,885 which consisted of $9,616 in cash held in bank accounts, and $5,520 in VAT tax and $90,749 in prepaid expenses. (December 31, 2022 - $351,887,

which consisted of $214,178 in cash held in bank accounts, $35,497 in VAT tax and $102,212 in prepaid expenses).

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in obtaining funds to meet current obligations and future commitments. The Company's approach to managing liquidity risk is to forecast cash requirements to provide reasonable assurance that it will have sufficient funds to meet its liabilities when due. As of December 31, 2023, the Company had cash of $9,616 to settle current liabilities in the amount of $340,780 (December 31, 2022 – cash of $214,178 to settle current liabilities in the amount of $215,523). The tables below present the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

As of December 31, 2023:

	Carrying amount
Accounts payable	$ 273,831
Related parties	53,197
Accrued expenses	13,752
	$ 340,780

As of December 31, 2022:

	Carrying amount
Accounts payable	$ 142,314
Related parties	45,514
Accrued expenses	27,695
	$ 215,523

Market risk

(iii) Interest rate risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its cash equivalents.

(iv) Foreign currency risk

The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. The Company operates in Israel and most of the Company’s expenditures are currently incurred in USD. However, the Company also has expenditures in NIS. The Company has not hedged its exposure to currency fluctuations. As of December 31, 2023, if the Company’s functional currency (USD) had strengthened/ weakened by 5% against the ILS, with all other variables held constant, the loss for the period would decrease /increase by approximately $1,600.

Development Stage Company

Shelffe has only a limited history upon which one can evaluate its business and prospects as its technologies are still at an early stage of development and thus Shelffe has limited experience and has not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area. The likelihood of the success of the Company must be considered in light of the risks inherent in, and the difficulties, costs and complications associated with the early growth stages of a business enterprise, as well as with the development and marketing of new products.

Future Capital Needs

Any failure to raise additional funds on favorable terms is likely to have a material adverse effect on the Company's liquidity and financial condition.

Dependence on Key Personnel

Applicability of Patents and Proprietary Technology

advantages; (iii) patents could be challenged by third parties; (iv) the patents of others could impede our ability to do business; (v) competitors may find ways to design around our patented products; and (vi) competitors could independently develop products which duplicate our products.

Economic and military instability in Israel and in the Middle East

The Company's operational offices are located in Israel. In addition, a majority of the Company's employees, officers and directors are residents of Israel. Accordingly, political, economic and military conditions in the Middle East may directly affect the business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the Company's operations and results of operations.

In October 2023, Hamas terrorists infiltrated Israel's southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas launched extensive rocket attacks on the Israeli population and industrial centers located along Israel's border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers. Following the attack, Israel's security cabinet declared war against Hamas and commenced a military campaign against Hamas and these terrorist organizations in parallel continued rocket and terror attacks. As a result of the events in October 2023, the Israeli government declared that the country was at war and the Israeli military began to call-up reservists for active duty. To date, none of our members of management nor significant number of employees is in active military reserve duty. Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations.

The Company is continuing with its operations in Israel. The Company continues to assess the effects of the state of war on its financial statements and business. The intensity and duration of Israel's current war against Hamas is difficult to predict at this stage, as are such war's economic implications on our business and operations and on Israel's economy in general. If the war extends for a long period of time or expands to other fronts, such as Lebanon, Syria and the West Bank, our operations may be adversely affected.

of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business.

#

B-1

SCHEDULE B

OMNIBUS STOCK AWARD PLAN

SECTION 1

DEFINITIONS AND INTERPRETATION

Definitions

As used herein, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the meanings set forth below:

(a) “Sub-Plan for Award Holders in Israel” means the Sub Plan, a copy of which is attached hereto as Appendix “A” for Award Holders who are resident in Israel.

(b) “Administrator” means such Executive or Employee of the Company as may be designated as Administrator by the Committee from time to time, or, if no such person is appointed, the Committee itself.

(i) any relative, including the spouse of that person or a relative of that person’s spouse, where the relative has the same home as the person;

(ii) any partner, other than a limited partner, of that person;

(iii) any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity; and

(iv) any corporation of which such person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the corporation.

(d) “Award” means a grant of Options, Stock Awards, or Restricted Share Units under the Plan or any Sub-Plan.

(e) “Award Certificates” means the certificates evidencing the Awards.

(f) “Award Holder” means a Person who holds an unexercised and unexpired Award or, where applicable, the Personal Representative of such person.

(g) “Black-Out” means a restriction imposed by the Company on all or any of its directors, officers, Employees, Insiders or persons in a special relationship whereby they are to refrain from trading in the Company’s securities until the restriction has been lifted by the Company.

(h) “Board” means the board of directors of the Company.

(i) “Change of Control” means an occurrence when either:

(i) a reorganization, amalgamation, merger or plan of arrangement in connection with any of the foregoing, other than solely involving the Corporation and one or more of its Subsidiaries, with respect to which all or substantially all of the persons who were the beneficial owners of the Common Shares immediately prior to such reorganization, amalgamation, merger or plan of arrangement do not, following such reorganization, amalgamation, merger or plan of arrangement beneficially own, directly or indirectly, more than 50 percent of the resulting voting shares on a fully-diluted basis;

(ii) the acquisition of Common Shares by a person or group of persons acting in concert (other than the Corporation or a Subsidiary of the Corporation) as a result of which the offeror and its affiliates beneficially own, directly or indirectly, 50 percent or more of the Common Shares then outstanding; or

(iii) the sale to a person other than a Subsidiary of the Corporation of all or substantially all of the Corporation’s assets.

(j) “Committee” means a committee of the Board to which the responsibility of approving the grant of Awards has been delegated, or if no such committee is appointed, the Board itself.

(k) “Company” means Shelfie-Tech Ltd., a company formed under the laws of the State of Israel.

(l) “Consultant” means an individual who:

(i) is engaged to provide, on an ongoing bona fide basis, consulting, technical, management or other services to the Company or any Related Entity of the Company other than services provided in relation to a “distribution” (as that term is described in the Securities Act);

(ii) provides the services under a written contract between the Company or any Subsidiary and the individual or a Consultant Entity (as defined in clause (l)(v) below);

(iii) in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business of the Company or any Subsidiary; and

(iv) has a relationship with the Company or any Subsidiary that enables the individual to be knowledgeable about the business and affairs of the Company or is otherwise permitted by applicable Regulatory Rules to be granted Awards as a Consultant or as an equivalent thereof,

and includes:

(v) a corporation of which the individual is an Employee or shareholder or a partnership of which the individual is an Employee or partner (a “Consultant Entity”); or

(vi) an RRSP or RRIF established by or for the individual under which he or she is the beneficiary.

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(m) “CSE” means the Canadian Securities Exchange.

(n) “Disability” means a medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, and which causes an individual to be unable to engage in any substantial gainful activity, or any other condition of impairment which cannot be accommodated under applicable human rights laws without imposing undue hardship on the Company or any Subsidiary employing or engaging the Person, that the Committee, acting reasonably, determines constitutes a disability.

(o) “Employee” means:

(i) an individual who works full-time or part-time for the Company or any Related Entity of the Company and such other individual as may, from time to time, be permitted by applicable Regulatory Rules to be granted Awards as an Employee or as an equivalent thereto; or

(ii) an individual who works for the Company or any Subsidiary either full-time or on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an Employee and who is subject to the same control and direction by the Company or any Subsidiary over the details and methods of work as an Employee of the Company or any Subsidiary, but for whom income tax deductions are not made at source,

and includes:

(i) a corporation wholly-owned by such individual; and

(ii) any RRSP or RRIF established by or for such individual under which he or she is the beneficiary.

(p) “Exchange” means the stock exchange upon which the Company’s shares principally trade.

(q) “Executive” means an individual who is a director or officer of the Company or a Related Entity of the Company, and includes:

(i) a corporation wholly-owned by such individual; and

(ii) any RRSP or RRIF established by or for such individual under which he or she is the beneficiary.

(r) “Exercise Notice” means the written notice of the exercise of an Option, in the form to be determined by the Company, or by written notice in the case of uncertificated Shares, duly executed by the Award Holder.

(s) “Exercise Period” means the period during which a particular Option may be exercised and is the period from and including the Grant Date through to and including the Expiry Time on the Expiry Date provided, however, that the Option has Vested pursuant to the terms and conditions of this Plan and any additional terms and conditions imposed by the Committee,

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and that no Option can be exercised unless and until all necessary Regulatory Approvals have been obtained.

(t) “Exercise Price” means the price at which an Award is exercisable or purchasable (as applicable) as determined in accordance with section 25.3.

(u) “Expiry Date” means the date the Award expires as set out in the Award Certificate or as otherwise determined in accordance with sections 25.4, 28.2, 28.3, 28.4 or 213.4.

(v) “Expiry Time” means the time the Award expires on the Expiry Date, which is 4:00 p.m. local time in Vancouver, British Columbia on the Expiry Date.

(w) “Grant Date” means the date on which the Committee grants a particular Award, which is the date the Award comes into effect provided however that no Award can be exercised or purchased (as applicable) unless and until all necessary Regulatory Approvals have been obtained.

(x) “Insider” means an insider as that term is defined in the Securities Act.

(y) “Investor Relations Activities” means any activities, by or on behalf of the Company or shareholder of the Company, that promote or reasonably could be expected to promote the purchase or sale of securities of the Company, but does not include:

(i) the dissemination of information provided, or records prepared, in the ordinary course of business of the Company:

(A) to promote the sale of products or services of the Company; or

(B) to raise public awareness of the Company,

that cannot reasonably be considered to promote the purchase or sale of securities of the Company;

(ii) activities or communications necessary to comply with the requirements of:

(A) applicable securities laws; or

(B) Exchange requirements or the by-laws, rules or other regulatory instruments of any other self-regulatory body or exchange having jurisdiction over the Company;

(iii) communications by a publisher of, or writer for, a newspaper, magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if:

(A) the communication is only through the newspaper, magazine or publication; and

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(B) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer; or

(iv) activities or communications that may be otherwise specified by the Exchange.

(z) “Market Value” means the market value of the Shares as determined in accordance with section 5.3.

(aa) “NI 45-106” means National Instrument 45-106—Prospectus Exemptions.

(bb) “Personal Representative” means:

(i) in the case of a deceased Award Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and

(ii) in the case of an Award Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Award Holder.

(cc) “Plan” means this award plan as from time to time amended and restated.

(dd) “Regulatory Approvals” means any necessary approvals of the Regulatory Authorities as may be required from time to time for the implementation, operation or amendment of this Plan or for the Awards granted from time to time hereunder.

(ee) “Regulatory Authorities” means any Exchange or any other organized trading facilities on which the Shares are listed, and all securities commissions or similar securities regulatory bodies having jurisdiction over the Company, this Plan or the Awards granted from time to time hereunder.

(ff) “Regulatory Rules” means all corporate and securities laws, regulations, rules, policies, notices, instruments and other orders of any kind whatsoever which may, from time to time, apply to the implementation, operation or amendment of this Plan or the Awards granted from time to time hereunder including, without limitation, those of the applicable Regulatory Authorities.

(gg) “Related Entity” means a Person that is controlled by the Company, a Person that controls the Company, or is controlled by the same Person that controls the Company. For the purposes of this Plan, a Person (first person) is considered to control another Person (second person) if the first Person, directly or indirectly, has the power to direct the management and policies of the second person by virtue of:

(i) ownership of or direction over voting securities in the second Person;

(ii) a written agreement or indenture;

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(iii) being the general partner or controlling the general partner of the second Person; or
(iv) being a trustee of the second Person.

(hh) “Related Person”:
(i) means an Insider of the Company or Related Entity; or
(ii) means an Associate of an Insider of the Company or Related Entity.

(ii) “Restricted Share Unit” or “RSU” mean a unit granted or credited to an Award Holder’s notional account pursuant to the terms of this Plan that, subject to the provisions hereof, entitles such person to receive RSU Shares.
(jj) “RSU Shares” means the Shares delivered to an Award Holder in accordance with the provisions of the Plan in settlement of RSUs under this Plan.
(kk) “Securities Act” means the Securities Act (British Columbia), RSBC 1996, c.418 as from time to time amended.
(ll) “Share” or “Shares” means, as the case may be, one or more common shares without par value in the capital stock of the Company.
(mm) “Stock Award” means a unit granted or credited to an Award Holder’s notional account pursuant to the terms of this Plan that, subject to the provisions hereof, entitles such person to receive Stock Award Shares.
(nn) “Stock Award Shares” means the Shares delivered to an Award Holder in accordance with the provisions of the Plan in settlement of Stock Awards under this Plan.
(oo) “Sub-Plan” means any sub-plan subject to the terms of the Plan including for greater certainty the Sub-Plan for Award Holders in Israel.
(pp) “Subsidiary” means a wholly-owned or controlled corporation of the Company.
(qq) “Triggering Event” means:
(i) the proposed dissolution, liquidation or wind-up of the Company;
(ii) a proposed merger, amalgamation, arrangement or reorganization of the Company with one or more corporations as a result of which, immediately following such event, the shareholders of the Company as a group, as they were immediately prior to such event, are expected to hold less than a majority of the outstanding capital stock of the surviving corporation;
(iii) the proposed acquisition of all or substantially all of the issued and outstanding shares of the Company by one or more Persons;
(iv) a proposed Change of Control of the Company;
(v) the proposed sale or other disposition of all or substantially all of the assets of the Company; or
(vi) a proposed material alteration of the capital structure of the Company which, in the opinion of the Committee, is of such a nature that it is not practical or feasible to

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make adjustments to this Plan or to the Awards granted hereunder to permit the Plan and Awards granted hereunder to stay in effect.

(rr) “Vest”, “Vesting” or “Vested” means that a portion of the Award granted to the Award Holder which is available to be exercised or purchased (as applicable) by the Award Holder at any time and from time to time.

Choice of Law

The Plan is established under, and the provisions of the Plan shall be subject to and interpreted and construed solely in accordance with, the laws of the Province of British Columbia and the laws of Canada applicable therein without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction. The Company and each Award Holder hereby attorn to the jurisdiction of the Courts of British Columbia.

Headings

The headings used herein are for convenience only and are not to affect the interpretation of the Plan.

SECTION 2 GRANT OF AWARDS

2.1 Grant of Awards

(a) The Committee shall, from time to time in its sole discretion, grant Awards to such Persons and on such terms and conditions as are permitted under this Plan. No member of the Committee shall be liable for any action or determination taken or made in good faith in the administration, interpretation, construction or application of the Plan or any options granted under it.

2.2 Record of Award Grants

The Committee shall be responsible to maintain a record of all Awards granted under this Plan and such record shall contain, in respect of each Award:

(a) the name and address of the Award Holder;

(b) the category (Executive, Employee or Consultant) under which the Award was granted to him, her or it;

(d) the number of Shares which may be acquired on the exercise, vesting or purchase (as applicable) of the Award and the Exercise Price of the Award, if any;

(e) the Vesting and other additional terms, if any, attached to the Award; and

(f) the particulars of each and every time the Award is exercised or purchased (as applicable).

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2.3 Effect of Plan

All Awards granted pursuant to the Plan shall be subject to the terms and conditions of the Plan notwithstanding the fact that the Award Certificates issued in respect thereof do not expressly contain such terms and conditions but instead incorporate them by reference to the Plan. The Award Certificates will be issued for convenience only and in the case of a dispute with regard to any matter in respect thereof, the provisions of the Plan and the records of the Company shall prevail over the terms and conditions in the Award Certificate, save and except as noted below. Each Award will also be subject to, in addition to the provisions of the Plan, the terms and conditions contained in the schedules, if any, attached to the Award Certificate for such Award. Should the terms and conditions contained in such schedules be inconsistent with the provisions of the Plan, such terms and conditions will supersede the provisions of the Plan.

2.4 Hold Period

In addition to any resale restrictions under applicable legislation, all options granted hereunder and all Common Shares issued on the exercise of Options, Stock Awards or RSUs will be subject to a four (4) month hold period (“Hold Period”) from the date the Awards are granted and the Awards and any Common Shares issuable on the exercise thereof must bear the following legends:

> “WITHOUT PRIOR WRITTEN APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL [INSERT THE DATE IMMEDIATELY FOLLOWING THE DATE WHICH IS FOUR MONTHS AFTER THE DATE OF THE GRANT OF THE OPTION.]”

SECTION 3 PURPOSE AND PARTICIPATION

3.1 Purpose of Plan

The purpose of the Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified Executives, Employees and Consultants to contribute toward the long term goals of the Company, and to encourage such individuals to acquire Shares of the Company as long term investments.

3.2 Participation in Plan

The Committee shall, from time to time and in its sole discretion, determine those Executives, Employees and Consultants to whom Awards are to be granted.

3.3 Limits on Award Grants

The Company shall only grant Awards under this Plan in accordance with Section 12 hereof and, for greater certainty, may not grant any Awards under this Plan unless an exemption under NI 45-106 is available. For so long as the Company is an unlisted reporting issuer, or is otherwise a reporting issuer

listed on the CSE, Section 2.24 of NI 45-106 shall not apply to the Plan and all Awards granted thereunder to any Employees or Consultants who are engaged in Investor Relations Activities for the Company, any associated Consultant, any executive officer of the Company, any director of the Company or any permitted assign of those Persons if, after the grant:

(a) the number of securities, calculated on a fully diluted basis, reserved for issuance under Awards granted to:

(i) Related Persons, exceeds 10% of the outstanding securities of the Company; or
(ii) a Related Person, exceeds 5% of the outstanding securities of the Company; or

(b) the number of securities, calculated on a fully diluted basis, issued within 12 months to

(i) Related Persons, exceeds 10% of the outstanding securities of the Company; or
(ii) a Related Person and the associates of the Related Person, exceeds 5% of the outstanding securities of the Company;

unless the Company obtains security holder approval in accordance with the Regulatory Rules, including the requirements under NI 45-106.

It is noted that at a meeting of shareholders held on November 14, 2023 the Shareholders, other than votes attached to Common Shares held by Related Persons, approved an increase in the percentages listed in Sections 3.3(a)(i) and 3.3(b)(i) from 10% to 15%.

3.4 Limits on Award Grants for Investor Relations Activities

The maximum number of Awards which may be granted within a 12 month period to Employees or Consultants engaged in Investor Relations Activities must not exceed 2% of the Outstanding Issue.

3.5 Notification of Grant

Following the granting of an Award, the Administrator shall, within a reasonable period of time, notify the Award Holder in writing of the grant and shall enclose with such notice the Award Certificate representing the Award so granted. In no case will the Company be required to deliver an Award Certificate to an Award Holder until such time as the Company has obtained all necessary Regulatory Approvals for the grant of the Award.

3.6 Copy of Plan

Each Award Holder shall be promptly provided with a copy of the Plan (and any amendment thereto) upon request from an Award Holder to the Administrator.

3.7 Limitation on Service

The Plan does not give any Award Holder that is an Executive the right to serve or continue to serve as an Executive of the Company or any Subsidiary, nor does it give any Award Holder that is an

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Employee or Consultant the right to be or to continue to be employed or engaged by the Company or any Subsidiary.

3.8 No Obligation to Exercise or Purchase

Award Holders shall be under no obligation to exercise or purchase Awards.

3.9 Agreement

The Company and every Award Holder granted an Award hereunder shall be bound by and subject to the terms and conditions of this Plan. By accepting an Award granted hereunder, the Award Holder has expressly agreed with the Company to be bound by the terms and conditions of this Plan. In the event that the Award Holder receives his, her or its Awards pursuant to an oral or written agreement with the Company or a Subsidiary, whether such agreement is an employment agreement, consulting agreement or any other kind of agreement of any kind whatsoever, the Award Holder acknowledges that in the event of any inconsistency between the terms relating to the grant of such Awards in that agreement and the terms attaching to the Awards as provided for in this Plan, the terms provided for in this Plan shall prevail and the other agreement shall be deemed to have been amended accordingly.

3.10 Notice

Any notice, delivery or other correspondence of any kind whatsoever to be provided by the Company to an Award Holder will be deemed to have been provided if provided to the last home address, fax number or email address of the Award Holder in the records of the Company and the Company shall be under no obligation to confirm receipt or delivery.

3.11 Representation

As a condition precedent to the issuance of an Award, the Company must be able to represent to the Exchange as of the Grant Date that the Award Holder is a bona fide Executive, Employee or Consultant of the Company or any Subsidiary.

SECTION 4 NUMBER OF SHARES UNDER PLAN

4.1 Committee to Approve Issuance of Shares

The Committee shall approve by resolution the issuance of all Shares to be issued to Award Holders upon the exercise, vesting or purchase (as applicable) of Awards, such authorization to be deemed effective as of the Grant Date of such Awards regardless of when it is actually done. The Committee shall be entitled to approve the issuance of Shares in advance of the Grant Date, retroactively after the Grant Date, or by a general approval of this Plan.

4.2 Number of Shares

Subject to adjustment as provided for herein, the number of Shares which will be available for purchase pursuant to Awards granted pursuant to this Plan, plus any other outstanding stock wards of the Company granted pursuant to a previous stock award plan or agreement, will not exceed 20% of the

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Outstanding Issue. If any Award expires or otherwise terminates for any reason without having been exercised, vested or purchased (as applicable) in full, the number of Shares in respect of such expired or terminated Award shall again be available for the purposes of granting Awards pursuant to this Plan.

4.3 Fractional Shares

No fractional shares shall be issued upon the exercise, vesting or purchase (as applicable) of any Award and, if as a result of any adjustment, an Award Holder would become entitled to a fractional share, such Award Holder shall have the right to purchase only the next lowest whole number of Shares and no payment or other adjustment will be made for the fractional interest.

SECTION 5 TERMS AND CONDITIONS OF OPTIONS

5.1 Exercise Period of Option

Subject to sections 25.4, 28.2 28.3, 28.4 and 213.4, the Grant Date and the Expiry Date of an Option shall be the dates fixed by the Committee at the time the Option is granted and shall be set out in the Award Certificate issued in respect of such Option.

5.2 Number of Shares Under Option

The number of Shares which may be purchased pursuant to an Option shall be determined by the Committee and shall be set out in the Award Certificate issued in respect of the Option.

5.3 Exercise Price of Option

The Exercise Price at which an Award Holder may purchase a Share upon the exercise of an Option shall be determined by the Committee and shall be set out in the Award Certificate issued in respect of the Option. Notwithstanding the foregoing, the Exercise Price shall not be less than the Market Value of the Shares as of the Grant Date. The Market Value of the Shares for a particular Grant Date shall be determined as follows:

(a) if the Company's Shares are listed on the CSE, and the Committee determines the CSE to be the Company's primary Exchange, Market Value will be the greater of the closing trading price of the Shares on: (i) the trading day prior to the Grant Date; and (ii) the Grant Date;

(b) subject to subparagraph (a) above, for each organized trading facility on which the Shares are listed, Market Value will be the closing trading price of the Shares on the day immediately preceding the Grant Date, and may be less than this price if it is within the discounts permitted by the applicable Regulatory Authorities;

(c) if the Company's Shares are listed on more than one organized trading facility, the Market Value shall be the Market Value as determined in accordance with subparagraphs (a) or (b) above for the primary organized trading facility on which the Shares are listed, as determined by the Committee, subject to any adjustments as may be required to secure all necessary Regulatory Approvals;

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(d) subject to subparagraph (a), if the Company’s Shares are listed on one or more organized trading facilities but have not traded during the ten trading days immediately preceding the Grant Date, then the Market Value will be, subject to any adjustments as may be required to secure all necessary Regulatory Approvals, such value as is determined by the Committee; and

(e) if the Company’s Shares are not listed on any organized trading facility, then the Market Value will be, subject to any adjustments as may be required to secure all necessary Regulatory Approvals, such value as is determined by the Committee to be the fair value of the Shares, taking into consideration all factors that the Committee deems appropriate, including, without limitation, recent sale and offer prices of the Shares in private transactions negotiated at arms’ length. Notwithstanding anything else contained herein, in no case will the Market Value be less than the minimum prescribed by each of the organized trading facilities that would apply to the Company on the Grant Date in question.

5.4 Termination of Option

Subject to such other terms or conditions that may be attached to Options granted hereunder, an Award Holder may exercise a Vested Option in whole or in part at any time and from time to time during the Exercise Period. Any Vested Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no effect as of the Expiry Time on the Expiry Date. The Expiry Date of an Option shall be the earlier of the date so fixed by the Committee at the time the Option is granted as set out in the Award Certificate and the date established, if applicable, in paragraphs (a) or (b) below or sections 28.2, 28.3, 28.4 or 213.4 of this Plan:

(a) Ceasing to Hold Office - In the event that the Award Holder holds his or her Option as an Executive and such Award Holder ceases to hold such position other than by reason of death or Disability, the Expiry Date of the Option shall be, unless otherwise determined by the Committee and expressly provided for in the Award Certificate, the 90th day following the date the Award Holder ceases to hold such position unless the Award Holder ceases to hold such position as a result of:

(i) ceasing to meet the qualifications set forth in the corporate legislation applicable to the Company;

(ii) a special resolution having been passed by the shareholders of the Company removing the Award Holder as a director of the Company or any Subsidiary; or

(iii) an order made by any Regulatory Authority having jurisdiction to so order,

in which case the Expiry Date shall be the date the Award Holder ceases to hold such position;

(b) Ceasing to be Employed or Engaged - In the event that the Award Holder holds his or her Option as an Employee or Consultant and such Award Holder ceases to hold such position other than by reason of death or Disability, the Expiry Date of the Award shall be, unless otherwise determined by the Committee and expressly provided for in the Award Certificate,

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the 90th day following the date the Award Holder ceases to hold such position, unless the Award Holder ceases to hold such position as a result of:

(i) termination for cause; or
(ii) an order made by any Regulatory Authority having jurisdiction to so order,

in which case the Expiry Date shall be the date the Award Holder ceases to hold such position, except if the Award Holder ceases to hold such position as a result resigning his or her position in which event the Expiry Date of the Option shall be, unless otherwise determined by the Committee and expressly provided for in the Award Certificate, the 30th day following the date the Award Holder ceases to hold such position. For greater certainty any unvested Options will be immediately cancelled and forfeited to the Company for no consideration.

Notwithstanding Section 5.4(a) and (b) hereof, In the event that an Award Holder ceases to hold the position of Executive, Employee, Consultant, or director for which the Option was originally granted, but comes to hold a different position as an Executive, Employee or Consultant prior to the expiry of the Option, the Option shall stay in place for that Award Holder with such Option then to be treated as being held by that Award Holder in his or her new position and such will not be considered to be an amendment to the Option in question requiring the consent of the Award Holder under Section 11.2 of this Plan.

Notwithstanding anything else contained herein, in no case will an Option be exercisable later than the Expiry Date of the Option.

5.5 Vesting of Option and Acceleration

The Vesting schedule for an Option, if any, shall be determined by the Committee and shall be set out in the Award Certificate issued in respect of the Option. The Committee may elect, at any time, to accelerate the Vesting schedule of one or more Options including, without limitation, on a Triggering Event, and such acceleration will not be considered an amendment to the Option in question requiring the consent of the Award Holder under section 11.2 of this Plan.

5.6 Additional Terms

Subject to all applicable Regulatory Rules and all necessary Regulatory Approvals, the Committee may attach additional terms and conditions to the grant of a particular Option, such terms and conditions to be set out in a schedule attached to the Award Certificate. The Award Certificates will be issued for convenience only, and in the case of a dispute with regard to any matter in respect thereof, the provisions of this Plan and the records of the Company shall prevail over the terms and conditions in the Award Certificate, save and except as noted below. Each Option will also be subject to, in addition to the provisions of the Plan, the terms and conditions contained in the schedules, if any, attached to the Award Certificate for such Award. Should the terms and conditions contained in such schedules be inconsistent with the provisions of the Plan, such terms and conditions will supersede the provisions of the Plan.

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SECTION 6
TERMS AND CONDITIONS OF STOCK AWARDS

6.1 Eligibility

Stock Awards may be granted at any time and from time to time as determined by the Committee, either alone or in addition to other Awards granted under the Plan. The Committee shall determine the eligible Persons to whom, and the time or times at which, grants of Stock Awards will be made, the number of Stock Awards to be awarded, the number of Shares subject to the Stock Awards, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.

6.2 Vesting of Restricted Share Units

Stock Award Shares shall be issued to or for the benefit of the Award Holder promptly following each vesting date determined by the Administrator, provided that the Award Holder is still engaged by the Company or its affiliate on the applicable vesting date. After each such vesting date the Company shall promptly cause to be issued for the benefit of the Award Holder, certificates for such Stock Award Shares with respect to Stock Awards that became vested on such vesting date, subject to Section 9.3 below. It is clarified that no Stock Award Shares shall be issued pursuant to the Stock Award to the Award Holder until the vesting criteria determined by the Committee is met.

6.3 Terms

Prior to the actual issuance of any Shares, each Stock Award will represent an unfunded and unsecured obligation of the Company.

SECTION 7
TERMS AND CONDITIONS OF RESTRICTED SHARE UNITS

7.1 Eligibility

Restricted Share Units may be granted at any time and from time to time as determined by the Committee, either alone or in addition to other Awards granted under the Plan. The Committee shall determine the eligible Persons to whom, and the time or times at which, grants of Restricted Share Units will be made, the number of Restricted Share Units to be awarded, the number of Shares subject to the Restricted Share Units, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.

7.2 Vesting of Restricted Share Units

RSU Shares shall be issued to or for the benefit of the Award Holder promptly following each vesting date determined by the Administrator, provided that the Award Holder is still engaged by the Company or its affiliate on the applicable vesting date. After each such vesting date the Company shall promptly cause to be issued for the benefit of the Award Holder, certificates for such RSU Shares with respect to Restricted Share Units that became vested on such vesting date, subject to Section 9.3 below. It is clarified that no RSU Shares shall be issued pursuant to the Restricted Share Units to the Award Holder until the vesting criteria determined by the Committee is met.

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7.3 Terms

Prior to the actual issuance of any Shares, each Restricted Share Unit will represent an unfunded and unsecured obligation of the Company.

SECTION 8
TRANSFERABILITY OF AWARDS

8.1 Non-transferable

Except as provided otherwise in this Section 8, Awards are non-assignable and non-transferable.

8.2 Death of Award Holder

In the event of the Award Holder’s death: (a) any Vested Options held by such Award Holder shall pass to the Personal Representative of the Award Holder and shall be exercisable by the Personal Representative on or before the date which is the earlier of one year following the date of death and the applicable Expiry Date; and (b) any unvested RSUs or Stock Awards previously credited to the Award Holder’s account will be cancelled, and vested RSUs or Stock Awards will be paid to the Award Holder’s estate, with any settlement or redemption to occur within 12 months following the termination date.

8.3 Disability of Award Holder

If the employment or engagement of an Award Holder as an Employee or Consultant or the position of an Award Holder as a director or officer of the Company or a Subsidiary is terminated by the Company by reason of such Award Holder’s Disability: (a) any Vested Options held by such Award Holder shall be exercisable by such Award Holder or by the Personal Representative on or before the date which is the earlier of one year following the termination of employment, engagement or appointment as a director or officer and the applicable Expiry Date; and (b) any unvested RSUs or Stock Awards previously credited to the Award Holder’s account will be cancelled, and vested RSUs or Stock Awards will be paid to the Award Holder or the Award Holder’s estate, with any settlement or redemption to occur within 12 months following the termination date.

8.4 Disability and Death of Award Holder

If an Award Holder has ceased to be employed, engaged or appointed as a director or officer of the Company or a Subsidiary by reason of such Award Holder’s Disability and such Award Holder dies within one year after the termination of such engagement, any Awards held by such Award Holder that could have been acquired upon exercise, vesting or purchase (as applicable) immediately prior to his or her death shall pass to the Personal Representative of such Award Holder and shall be exercisable or purchasable by the Personal Representative on or before the date which is the earlier of one year following the death of such Award Holder and the applicable Expiry Date.

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8.5 Vesting

Unless the Committee determines otherwise, Awards held by or exercisable by a Personal Representative shall, during the period prior to their termination, continue to Vest in accordance with any Vesting schedule to which such Awards are subject.

8.6 Deemed Non-Interruption of Engagement

Employment or engagement by the Company shall be deemed to continue intact during any military or sick leave or other bona fide leave of absence if the period of such leave does not exceed 90 days or, if longer, for so long as the Award Holder’s right to re-employment or re-engagement by the Company is guaranteed either by statute or by contract. If the period of such leave exceeds 90 days and the Award Holder’s re-employment or re-engagement is not so guaranteed, then his or her employment or engagement shall be deemed to have terminated on the ninety-first day of such leave.

SECTION 9

EXERCISE OR PURCHASE OF AWARD

9.1 Exercise or Purchase of Award

An Award may be exercised or purchased only by the Award Holder or the Personal Representative of any Award Holder. An Award Holder or the Personal Representative of any Award Holder may exercise or purchase an Award in whole or in part at any time and from time to time during the Exercise Period up to the Expiry Time on the Expiry Date by delivering to the Administrator the required Exercise Notice (in the case of an exercise of an Option only), or by written notice in the case of uncertificated Shares, the applicable Award Certificate and a certified cheque or bank draft or wire transfer payable to the Company or its legal counsel in an amount equal to the aggregate Exercise Price of the Shares then being purchased pursuant to the exercise or purchase of the Award. Notwithstanding anything else contained herein, Awards may not be exercised or purchased during a Black-Out unless the Committee determines otherwise.

9.2 Black Out Period

If an Award expires, terminates or is cancelled (other than an expiry, termination or cancellation pursuant to section 1.1(a) or section 1.1(b) above) within or immediately after a Black-Out, the Holder may elect for the term of such Award to be extended to the date which is ten (10) business days after the last day of the Black-Out.

9.3 Issue of Share Certificates

As soon as reasonably practicable following the receipt of the notice of exercise as described in section 29.1 (if applicable) and payment in full for the Awarded Shares being acquired (if applicable), the Administrator will direct its transfer agent, after the acquisition of the Awarded Shares, to issue to the Award Holder the appropriate number of Shares in either certificate form or at the election of the Company, on an uncertificated basis pursuant to the instructions given by the Award Holder to the Administrator. If the number of Shares so purchased is less than the number of Shares subject to the Award Certificate surrendered, the Administrator shall also provide a new Award Certificate for the

balance of Shares available under the Award to the Award Holder concurrent with delivery of the Shares.

9.4 No Rights as Shareholder

Until the date of the issuance of the certificate for the Shares purchased or received pursuant to the exercise, vesting or purchase (as applicable) of an Award, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to such Shares, notwithstanding the exercise, vesting or purchase (as applicable) of the Award, unless the Committee determines otherwise. In the event of any dispute over the date of the issuance of the Shares, the decision of the Committee shall be final, conclusive and binding.

9.5 Tax Withholding and Procedures

(a) If, following the exercise by a Award Holder of an Award or a portion thereof in accordance with the provisions of Section Error! Reference source not found. hereof, the Company is required under the Income Tax Act (Canada) or any other applicable law to make source deductions in respect of any benefits and to remit to the applicable governmental authority an amount on account of tax on the value of the taxable benefit associated with the issuance of the Award or Common Shares on exercise of Options ("Withholding Obligations"), then the Award Holder shall, in addition to the payment of the purchase price for the Common Shares then being purchased:

(i) pay to the Company sufficient cash as is reasonably determined by the Company to be the amount necessary to satisfy the Withholding Obligations; or
(ii) at the discretion of the Company, elect to permit the Company to reduce the number of Common Shares to be issued to the Award Holder by the number of Common shares having a fair market value at such time as is equal to the amount necessary to satisfy the Withholding Obligations; or make other arrangements acceptable to the Company to fund the Withholding Obligations.

(b) It is the responsibility of the Award Holder to ensure that they adhere to tax legislation in their jurisdiction regarding the reporting of benefits derived from the Award or exercise of Options.

(c) In the event any taxation authority should reassess the Company for failure to have withheld income tax, or other similar payments from the Award Holder, pursuant to the provisions herein, the Award Holder shall reimburse and save harmless the Company for the entire amount assessed, including penalties, interest and other charges.

(d) The Company will, within the time and in the manner prescribed by the Income Tax Act (Canada) (or any corresponding requirement under applicable provincial tax law), remit the Withholding Obligation to the Receiver General for Canada or other applicable tax authority and shall, to the extent necessary and within the time and in the manner prescribed by the Income Tax Act (Canada) (or any corresponding requirement under applicable provincial tax law), make the election contemplated by subsection 110(1.1) of the Income Tax Act (Canada) (or any corresponding requirement under applicable provincial tax law) that neither it nor any person with whom it does not deal at arm's length (for purposes of the Income Tax Act

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(Canada)) will deduct any amount in respect of any payment to the Award Holder in connection with the exercise or surrender of his or her options and the Company shall also provide evidence of such election to the Award Holder forthwith upon making such election.

SECTION 10 ADMINISTRATION

10.1 Board or Committee

The Plan shall be administered by the Administrator with oversight by the Committee.

10.2 Powers of Committee

The Committee shall have the authority to do the following:

(a) oversee the administration of the Plan in accordance with its terms;

(b) appoint or replace the Administrator from time to time;

(c) determine all questions arising in connection with the administration, interpretation and application of the Plan, including all questions relating to the Market Value;

(d) correct any defect, supply any information or reconcile any inconsistency in the Plan in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan;

(e) prescribe, amend, and rescind rules and regulations relating to the administration of the Plan. For the avoidance of doubt, as long as the Company’s securities are traded on an Exchange, the provisions of this Plan shall be subject to the directives, rules and regulations of the applicable Exchange, which shall govern over any conflicting provision in the Plan or Award Certificate. In the event that any of the provisions of this Plan do not comply with such directives, rules and regulations, the Administrator and/or the Committee shall be entitled to automatically amend the provisions of this Plan in order to comply with the directives, rules and regulations of the applicable Exchange;

(f) determine the duration and purposes of leaves of absence from employment or engagement by the Company which may be granted to Award Holders without constituting a termination of employment or engagement for purposes of the Plan;

(g) do the following with respect to the granting of Awards:

(i) determine the Executives, Employees or Consultants to whom Awards shall be granted, based on the eligibility criteria set out in this Plan;

(ii) determine the terms of the Award to be granted to an Award Holder including, without limitation, the Grant Date, Expiry Date, Exercise Price and Vesting schedule (which need not be identical with the terms of any other Award);

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(iii) subject to any necessary Regulatory Approvals and section 211.2, amend the terms of any Awards;
(iv) determine when Awards shall be granted;
(v) allow for the cashless exercise of Options and the applicable terms and conditions thereof; and
(vi) determine the number of Shares subject to each Award;

(h) accelerate the Vesting schedule of any Award previously granted; and
(i) make all other determinations necessary or advisable, in its sole discretion, for the administration of the Plan.

10.3 Administration by Committee

All determinations made by the Committee in good faith shall be final, conclusive and binding upon all persons. The Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan.

10.4 Interpretation

The interpretation by the Committee of any of the provisions of the Plan and any determination by it pursuant thereto shall be final, conclusive and binding and shall not be subject to dispute by any Award Holder. No member of the Committee or any person acting pursuant to authority delegated by it hereunder shall be personally liable for any action or determination in connection with the Plan made or taken in good faith and each member of the Committee and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Company.

SECTION 11 APPROVALS AND AMENDMENT

11.1 Shareholder Approval of Plan

If required by a Regulatory Authority or by the Committee, this Plan may be made subject to the approval of the shareholders of the Company as prescribed by the Regulatory Authority. If shareholder approval is required, any Awards granted under this Plan prior to such time will not be exercisable or binding on the Company unless and until such shareholder approval is obtained.

11.2 Amendment of Award or Plan

Subject to any required Regulatory Approvals, the Committee may from time to time amend any existing Award or the Plan or the terms and conditions of any Award thereafter to be granted provided that where such amendment relates to an existing Award and it would:

(a) materially decrease the rights or benefits accruing to an Award Holder; or

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(b) materially increase the obligations of an Award Holder; then, unless otherwise excepted out by a provision of this Plan, the Committee must also obtain the written consent of the Award Holder in question to such amendment. If at the time the Exercise Price of an Award is reduced the Award Holder is an Insider of the Company, the Insider must not exercise or purchase the Award at the reduced Exercise Price until the reduction in Exercise Price has been approved by the disinterested shareholders of the Company, if required by the Exchange.

SECTION 12

CONDITIONS PRECEDENT TO ISSUANCE OF AWARDS AND SHARES

12.1 Compliance with Laws

An Award shall not be granted, exercised or purchased, and Shares shall not be issued pursuant to the exercise, vesting or purchase (as applicable) of any Award, unless the grant, exercise or purchase (as applicable) of such Award and the issuance and delivery of such Shares comply with all applicable Regulatory Rules, and such Awards and Shares will be subject to all applicable trading restrictions in effect pursuant to such Regulatory Rules and the Company shall be entitled to legend the Award Certificates and the certificates for the Shares or the written notice in the case of uncertificated Shares representing such Shares accordingly.

12.2 Regulatory Approvals

In administering this Plan, the Committee will seek any Regulatory Approvals which may be required. The Committee will not permit any Awards to be granted without first obtaining the necessary Regulatory Approvals unless such Awards are granted conditional upon such Regulatory Approvals being obtained. The Committee will make all filings required with the Regulatory Authorities in respect of the Plan and each grant of Awards hereunder. No Award granted will be exercisable or binding on the Company unless and until all necessary Regulatory Approvals have been obtained. The Committee shall be entitled to amend this Plan and the Awards granted hereunder in order to secure any necessary Regulatory Approvals and such amendments will not require the consent of the Award Holders under section 11.2 of this Plan.

12.3 Inability to Obtain Regulatory Approvals

The Company’s inability to obtain Regulatory Approval from any applicable Regulatory Authority, which Regulatory Approval is deemed by the Committee to be necessary to complete the grant of Awards hereunder, the exercise or purchase of those Awards or the lawful issuance and sale of any Shares pursuant to such Awards, shall relieve the Company of any liability with respect to the failure to complete such transaction.

SECTION 13

ADJUSTMENTS AND TERMINATION

13.1 Termination of Plan

Subject to any necessary Regulatory Approvals, the Committee may terminate or suspend the Plan. Unless earlier terminated as provided in this Section 13, the Plan shall terminate on, and no more

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Awards shall be granted under the Plan after, the tenth anniversary of the date of the Exchange’s acceptance of the Plan.

13.2 No Grant During Suspension of Plan

No Award may be granted during any suspension, or after termination, of the Plan. Suspension or termination of the Plan shall not, without the consent of the Award Holder, alter or impair any rights or obligations under any Award previously granted.

13.3 Alteration in Capital Structure

If there is a material alteration in the capital structure of the Company and the Shares are consolidated, subdivided, converted, exchanged, reclassified or in any way substituted for, the Committee shall make such adjustments to this Plan and to the Awards then outstanding under this Plan as the Committee determines to be appropriate and equitable under the circumstances, so that the proportionate interest of each Award Holder shall, to the extent practicable, be maintained as before the occurrence of such event. Such adjustments may include, without limitation:

(a) a change in the number or kind of shares of the Company covered by such Awards; and
(b) a change in the Exercise Price payable per Share provided, however, that the aggregate Exercise Price applicable to the unexercised or unpurchased portion of existing Awards shall not be altered, it being intended that any adjustments made with respect to such Awards shall apply only to the Exercise Price per Share and the number of Shares subject thereto.

For purposes of this section 13.3, and without limitation, neither:

(c) the issuance of additional securities of the Company in exchange for adequate consideration (including services); nor
(d) the conversion of outstanding securities of the Company into Shares shall be deemed to be material alterations of the capital structure of the Company. Any adjustment made to any Awards pursuant to this section 13.3 shall not be considered an amendment requiring the Award Holder’s consent for the purposes of section 11.2 of this Plan.

13.4 Triggering Events

Subject to the Company complying with section 213.5 and any necessary Regulatory Approvals and notwithstanding any other provisions of this Plan or any Award Certificate, the Committee may, without the consent of the Award Holder or Holders in question do one or more of the following:

(a) cause all or a portion of any of the Awards granted under the Plan to terminate upon the occurrence of a Triggering Event;
(b) cause all or a portion of any of the Awards granted under the Plan to be exchanged for stock awards of another corporation upon the occurrence of a Triggering Event in such ratio and at such Exercise Price as the Committee deems appropriate, acting reasonably; or

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(c) cause all Awards or portions thereof granted under the Plan to become immediately exercisable notwithstanding any contingent Vesting provision to which such Awards may have otherwise been subject.

Such termination or exchange shall not be considered an amendment requiring the Award Holder’s consent for the purpose of section 211.2 of the Plan.

13.5 Notice of Termination by Triggering Event

In the event that the Committee wishes to cause all or a portion of any of the Awards granted under this Plan to terminate on the occurrence of a Triggering Event, it must give written notice to the Award Holders in question not less than 10 days prior to the consummation of a Triggering Event so as to permit the Award Holder the opportunity to exercise or purchase the Vested portion of the Awards prior to such termination. Furthermore, if any of the Awards granted under this Plan are cancelled prior to their Expiry Date, the Company shall not grant new Awards to the same Persons or Entities until thirty (30) days have lapsed from the date of cancellation.

13.6 Determinations to be Made by Committee

Adjustments and determinations under this Section 13 shall be made by the Committee, whose decisions as to what adjustments or determination shall be made, and the extent thereof, shall be final, binding, and conclusive.

13.7 Sub Plan for Participants Subject to Israeli Taxation

Any Award Holders who are resident in Israel shall be subject to the Sub-Plan for Award Holders in Israel. For greater certainty any issuances to Award Holders subject to the Sub-Plan for Award Holders in Israel shall only be issuable provided they do not contradict the regulations of the Exchange.

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APPENDIX “A”
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SHELFIE-TECH LTD
STOCK AWARD PLAN, AS AMENDED AND RESTATED
SUB-PLAN FOR AWARD HOLDERS IN ISRAEL

SPECIAL PROVISIONS FOR AWARD HOLDERS IN ISRAEL

1.1. This 2023 Sub-Plan for Award Holders in Israel (the “Sub-Plan”) to the Shelfie-Tech Ltd. Stock Award Plan, as amended and restated (the “Plan”) is made in accordance with Section 13.7 of the Plan. This Sub-Plan was approved by Shelfie-Tech Ltd. (the “Company”).

1.2. The provisions specified hereunder apply only to persons who are deemed to be residents of the State of Israel for tax purposes or are otherwise subject to taxation in Israel with respect to Awards.

1.3. This Sub-Plan applies with respect to Awards granted under the Plan. The purpose of this Sub-Plan is to establish certain rules and limitations applicable to Awards that may be granted or issued under the Plan from time to time, in compliance with the tax, securities and other applicable laws currently in force in the State of Israel. Except as otherwise provided by this Sub-Plan, all grants made pursuant to this Sub-Plan shall be governed by the terms of the Plan. This Sub-Plan is applicable only to grants made after the date of its adoption. This Sub-Plan complies with, and is subject to, the ITO and Section 102.

1.4. The Plan and this Sub-Plan shall be read together. In any case of contradiction, whether explicit or implied, between the provisions of this Sub-Plan and the Plan, the provisions of this Sub-Plan shall govern. For the avoidance of doubt, as long as the Company’s securities are traded on an Exchange, the provisions of this Sub-Plan shall be subject to the directives, rules and regulations of the applicable Exchange, which shall govern over any conflicting provision in the Sub-Plan or Award Certificate. In the event that any of the provisions of this Sub-Plan do not comply with such directives, rules and regulations, the Administrator and/or the Committee shall be entitled to automatically amend the provisions of this Sub-Plan in order to comply with the directives, rules and regulations of the applicable Exchange.

DEFINITIONS

Capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Plan. The following additional definitions shall apply to grants made pursuant to this Sub-Plan:

“3(i) Award” means an Award, which is subject to taxation pursuant to Section 3(i) of the ITO, which has been granted to any person who is not an Eligible 102 Award Holder.

“102 Capital Gains Track” means the tax alternative set forth in Section 102(b)(2) and 102(b)(3) of the ITO pursuant to which all or a part of the income resulting from the sale of Shares is taxable as a capital gain.

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"102 Capital Gains Track Award" means a 102 Trustee Award qualifying for the special tax treatment under the 102 Capital Gains Track.

"102 Ordinary Income Track" means the tax alternative set forth in Section 102(b)(1) of the ITO pursuant to which income resulting from the sale of Shares derived from Awards is taxed as ordinary income.

"102 Ordinary Income Track Award" means a 102 Trustee Award qualifying for the ordinary income tax treatment under the 102 Ordinary Income Track.

"102 Trustee Award" means an Award granted pursuant to Section 102(b) of the ITO and held in trust by a Trustee for the benefit of the Eligible 102 Award Holder, and includes both 102 Capital Gains Track Awards and 102 Ordinary Income Track Awards.

"Affiliate" for the purpose of grants made under this Sub-Plan, means any affiliate of the Company that is an "employing company" within the meaning of Section 102(a) of the ITO.

"Controlling Shareholder" as defined in Section 32(9) of the ITO, currently defined as an individual who prior to the grant or as a result of the grant or exercise of any Award, holds or would hold, directly or indirectly, in his/her name or with a relative (as defined in the ITO) (i) 10% of the outstanding share capital of the Company, (ii) 10% of the voting power of the Company, (iii) the right to hold or purchase 10% of the outstanding equity or voting power, (iv) the right to obtain 10% of the "profits" of the Company (as defined in the ITO), or (v) the right to appoint a director of the Company.

"Deposit Requirements" shall mean with respect to a 102 Trustee Award, the requirement to evidence deposit of an Award with the Trustee, in accordance with Section 102, in order to qualify as a 102 Trustee Award. As of the time of approval of this Sub-Plan, the ITA guidelines regarding Deposit Requirements for 102 Capital Gains Track Awards require that the Trustee be provided with (a) the resolutions approving Awards intended to qualify as 102 Capital Gains Track Awards within 45 calendar days of the date of the Committee's approval of such Award, including full details of the terms of the Awards, and (b) a copy of the Award Agreement executed by the Eligible 102 Award Holder and/or Eligible 102 Award Holder's consent to the requirements of the 102 Capital Gains Track Award within 90 calendar days of the Committee's approval of such Award.

"Election" means the Company's or its Affiliate's choice of the type of 102 Trustee Awards it shall make under the Plan (as between 102 Capital Gains Track Awards or 102 Ordinary Income Track Awards), as filed with the ITA.

"Eligible 102 Award Holder" means an Award Holder who is a person employed by the Company or its Affiliates, including an individual who is serving as a director (as defined in the ITO) or an office holder (as defined in the ITO), who is not a Controlling Shareholder.

"Israeli Fair Market Value" shall mean with respect to 102 Capital Gains Track Awards only, for the sole purpose of determining tax liability pursuant to Section 102(b)(3) of the ITO, if at the date of grant the Company's shares are listed on any established stock exchange or a national market system, or if the Company's shares shall be registered for trading within ninety (90) days following the date of grant, the Fair Market Value of the Shares at the date of grant shall be determined in accordance with the

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average value of the Company's shares on the thirty (30) trading days preceding the date of grant or on the thirty (30) trading days following the date of registration for trading, as the case may be.

“ITA” means the Israel Tax Authority.

“ITO” means the Israeli Income Tax Ordinance (New Version), 1961, and the rules, regulations, orders or procedures promulgated thereunder and any amendments thereto, including specifically the Rules, all as may be amended from time to time.

“Non-Trustee Award” means an Award granted to an Eligible 102 Award Holder pursuant to Section 102(c) of the ITO and not held in trust by a Trustee.

“Required Holding Period” means the requisite period prescribed by the ITO and the Rules, or such other period as may be required by the ITA, with respect to 102 Trustee Awards, during which Awards granted by the Company must be held by the Trustee for the benefit of the person to whom it was granted. As of the date of the adoption of this Sub-Plan, the Required Holding Period for 102 Capital Gains Track Awards is 24 months from the date of grant of the Award.

“Rules” means the Income Tax Rules (Tax Benefits in Share Issuance to Employees) 5763-2003.

“Section 102” shall mean the provisions of Section 102 of the ITO, as amended from time to time, including by the Law Amending the Income Tax Ordinance (Number 132), 2002, effective as of January 1, 2003 and by the Law Amending the Income Tax Ordinance (Number 147), 2005.

“Trust Agreement” shall mean the trust agreement entered into between the Trustee and the Company.

“Trustee” means a person or entity designated by the Committee to serve as a trustee and approved by the ITA in accordance with the provisions of Section 102(a) of the ITO.

3. TYPES OF AWARDS AND SECTION 102 ELECTION

3.1. Awards made as 102 Trustee Awards shall be made pursuant to either (a) Sections 102(b)(2) and 102(b)(3) of the ITO as 102 Capital Gains Track Awards or (b) Section 102(b)(1) of the ITO as 102 Ordinary Income Track Awards. The Company's Election regarding the type of 102 Trustee Award it chooses to make shall be filed with the ITA. Once the Company (or its Affiliate) has filed such Election, it may change the type of 102 Trustee Award that it chooses to make only after the passage of at least 12 months from the end of the calendar year in which the first grant was made in accordance with the previous Election, in accordance with Section 102. For the avoidance of doubt,

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such Election shall not prevent the Company from granting Non-Trustee Awards to Eligible 102 Award Holders at any time.

3.2. For the avoidance of doubt, such Election shall not prevent the Company from granting Non-Trustee Awards to Eligible 102 Award Holders at any time.

3.3. Eligible 102 Award Holders may receive only 102 Trustee Awards or Non-Trustee Awards under this Sub-Plan. Award Holders who are not Eligible 102 Award Holders may be granted only 3(i) Awards under this Sub-Plan.

3.4. No 102 Trustee Awards may be made effective pursuant to this Sub-Plan until 30 days after the date the requisite filings required by the ITO and the Rules, including the filing of the Plan and Sub-Plan, have been made with the ITA.

3.5. The Award Agreement shall indicate whether the grant is a 102 Trustee Award, a Non-Trustee Award or a 3(i) Award; and, if the grant is a 102 Trustee Award, whether it is a 102 Capital Gains Track Award or a 102 Ordinary Income Track Award.

4. TERMS AND CONDITIONS OF 102 TRUSTEE GRANTS

4.1. Each 102 Trustee Award shall be deemed granted on the date approved by the Committee and stated in a written or electronic notice by the Company, provided that its qualification as a 102 Trustee Award shall be dependent upon the Company's and the Trustee's compliance with any applicable requirements set forth by the ITA with regard to such grants.

4.2. Notwithstanding anything to the contrary in the Plan, each 102 Trustee Award granted to an Eligible 102 Award Holder and each Share acquired pursuant to a 102 Trustee Award shall be deposited with a Trustee in compliance with the Deposit Requirements and held in trust by the Trustee (or be subject to a supervisory trustee arrangement if approved by the ITA). After termination of the Required Holding Period, the Trustee may release such Awards and any Shares issued with respect to such Award, provided that (i) the Trustee has received an acknowledgment from the ITA that the Eligible 102 Award Holder has paid any applicable tax due pursuant to the ITO or (ii) the Trustee and/or the Company or its Affiliate withholds any applicable tax due pursuant to the ITO. The Trustee shall not release any 102 Trustee Awards or shares issued with respect to the 102 Trustee Awards prior to the full payment of the Eligible 102 Award Holder's tax liabilities.

4.3. Each 102 Trustee Award shall be subject to the relevant terms of Section 102 and the ITO, which shall be deemed an integral part of the 102 Trustee Award and shall prevail over any term contained in the Plan, this Sub-Plan or Award Agreement that is not consistent therewith. Any provision of the ITO and any approvals of the ITA not expressly specified in this Sub-Plan or any document evidencing an Award that are necessary to receive or maintain any tax benefit pursuant to the Section 102 shall be binding on the Eligible 102 Award Holder. The Trustee and the Eligible 102 Award Holder granted a 102 Trustee Award shall comply with the ITO and the terms and conditions of the Trust Agreement. For avoidance of doubt, it is reiterated that compliance with the ITO specifically includes compliance with the Rules. Further, the Eligible 102 Award Holder agrees to execute any and all documents which the Company or the Trustee may reasonably determine to be necessary in order to comply with the provision of any applicable law, and, particularly, Section 102.

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With respect to 102 Capital Gain Track Awards, to the extent that the Shares are listed on any established stock exchange or a national market system, the provisions of Section 102(b)(3) of the ITO and the Israeli Fair Market Value shall apply with respect to the Israeli tax rate applicable to such Awards.

4.4. During the Required Holding Period, the Eligible 102 Award Holder shall not require the Trustee to release or sell the Awards and Shares received subsequently following any realization of rights derived from Awards or Shares (including stock dividends) to the Eligible 102 Award Holder or to a third party, unless permitted to do so by applicable law. Notwithstanding the foregoing, the Trustee may, pursuant to a written request and subject to applicable law, release and transfer such Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such transfer: (i) all taxes required to be paid upon the release and transfer of the Shares have been withheld for transfer to the tax authorities and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company's corporate documents, the Plan, any applicable Award Agreement and applicable law. To avoid doubt such sale or release during the Required Holding Period shall result in different tax ramifications to the Eligible 102 Award Holder under Section 102 and the Rules and/or any other regulations or orders or procedures promulgated thereunder, which shall apply to and shall be borne solely by such Eligible 102 Award Holder (including tax and mandatory payments otherwise payable by the Company or its Affiliates, which would not apply absent a sale or release during the Required Holding Period).

4.5. In the event a stock dividend is declared and/or additional rights are granted with respect to Shares which derive from Awards granted as 102 Trustee Awards, such dividend and/or rights shall also be subject to the provisions of this Section 4 and the Required Holding Period for such stock dividend and/or rights shall be measured from the commencement of the Required Holding Period for the Award with respect to which the dividend was declared and/or rights granted. In the event of a cash dividend on Shares, the Trustee shall transfer the dividend proceeds to the Eligible 102 Award Holder in accordance with the Plan after deduction of taxes and mandatory payments in compliance with applicable withholding requirements, and subject to any other requirements imposed by the ITA.

4.6. If an Award granted as a 102 Trustee Award is exercised/vests during the Required Holding Period, the Shares issued upon such exercise/vesting (as applicable) shall be issued in the name of the Trustee for the benefit of the Eligible 102 Award Holder (or be subject to a supervisory trustee arrangement if approved by the ITA). If such an Award is exercised or settled after the Required Holding Period ends, the Shares issued upon such exercise or settlement shall, at the election of the Eligible 102 Award Holder, either (i) be issued in the name of the Trustee (or be subject to a supervisory trustee arrangement if approved by the ITA), or (ii) be transferred to the Eligible 102 Award Holder directly, provided that the Eligible 102 Award Holder first complies with all applicable provisions of the Plan, this Sub-Plan and the applicable Award Agreement.

4.7. To avoid doubt: (i) notwithstanding anything to the contrary in the Plan, including without limitation Section 9.2 thereof, payment upon exercise or purchase of Awards granted under the 102 Capital Gains Track, may only be paid by cash or check, and not by: promissory note, surrender of Shares, reduction of Shares pursuant to a cashless exercise or net exercise arrangement or other forms of payment, unless and to the extent permitted under Section 102 and as authorized by the ITA or the prior approval of the ITA is obtained (as applicable); (ii) notwithstanding anything to the contrary in

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the Plan, including without limitation Section 12.3 thereof, certain adjustments and amendments to the terms of Awards granted under the 102 Capital Gains Track, including pursuant to dividend equivalents, recapitalization events, repricings, dividend adjustments and so forth, may disqualify the Awards from benefitting from the tax benefits under the 102 Capital Gains Track, unless and to the extent permitted under Section 102 and as authorized by the ITA or the prior approval of the ITA is obtained (as applicable); (iii) notwithstanding anything to the contrary in the Plan or in the Company's corporate documents, repurchase rights/call options with regard to Awards made as 102 Capital Gains Track Awards shall be subject to the prior approval of the ITA and any terms and conditions of such approval (as applicable); (iv) a notwithstanding anything to the contrary in the Plan, if an Award Holder ceases to be employed or engaged by the Company and/or its Affiliates, the vesting of any Awards granted under the 102 Capital Gains Track shall end as of such termination of employment or engagement; and (v) notwithstanding anything to the contrary in the Plan, Awards granted under the 102 Capital Gains Track may only be settled in Shares and not in cash.

4.8. Any Award granted under the 102 Capital Gains Track is meant to comply in full with the terms and conditions of Section 102 and the requirements of the ITA, and therefore the Plan and the Sub-Plan are to be read such that they comply with the requirements of Section 102. Should any provision in the Plan and/or the Sub-Plan disqualify the Plan and/or the Sub-Plan and/or any Award granted under Section 102 Capital Gain Track granted thereunder from beneficial tax treatment pursuant to the provisions of Section 102, such provision shall not apply to such Awards and the underlying Shares unless the ITA provides approval of compliance with Section 102.

5. NON-TRUSTEE AWARDS

5.1. Non-Trustee Awards granted hereunder shall be granted to, and the Shares issued pursuant thereto, issued to, the Israeli Award Holder.

5.2. Without derogating and subject to the above, and to all other applicable restrictions in the Plan, this Sub-Plan, the Award Agreement and applicable law, the Shares issued pursuant to the Non-Trustee Awards, and all rights attached thereto (including bonus shares) shall not be transferred unless and until the Company has either (a) withheld payment of all taxes required to be paid upon the sale or transfer thereof, if any, or (b) received confirmation either that such payment, if any, was remitted to the tax authorities or of another arrangement regarding such payment, which is satisfactory to the Company.

5.3. An Israeli Award Holder to whom Non-Trustee Awards are granted must provide, upon termination of his/her employment, a surety or guarantee to the satisfaction of the Company, to secure payment of all taxes which may become due upon the future transfer of his/her Shares to be issued pursuant to Non-Trustee Awards, all in accordance with the provisions of Section 102.

6. 3(i) AWARDS

6.1. 3(i) Awards granted hereunder shall be granted to, and the Shares issued pursuant thereto, issued to, the Israeli Award Holder.

6.2. Without derogating and subject to the above, and to all other applicable restrictions in the Plan, this Sub-Plan, the Award Agreement and applicable law, the Shares issued pursuant to 3(i)

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Awards cannot be exercised/settled unless and until the Company has either (a) withheld payment of all taxes required to be paid upon the exercise/settlement thereof, if any, or (b) received confirmation either that such payment, if any, was remitted to the tax authorities or of another arrangement regarding such payment, which is satisfactory to the Company; and (c) the Award Holder provided to the Company an invoice pertaining to the services rendered by him to Company.

6.3. The Company may require, as a condition to the grant of the 3(i) Awards, that an Israeli Award Holder to whom 3(i) Awards are to be granted, provide a surety or guarantee to the satisfaction of the Company, to secure payment of all taxes which may become due upon the future transfer of his/her Shares to be issued pursuant to the 3(i) Awards.

ASSIGNABILITY

As long as Awards or Shares are held by the Trustee on behalf of the Eligible 102 Award Holder, all rights of the Eligible 102 Award Holder over the Shares are personal, cannot be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution.

TAX CONSEQUENCES

8.1. Any tax consequences arising from the grant, or vesting or exercise of any Award, from the payment for Shares or the acquisition of Shares issued upon the exercise or vesting (as applicable) of the Award, from the sale or disposition of any Shares covered by an Award, or from any other event or act (of the Company and/or its Affiliates and/or the Trustee and/or the Award Holder) hereunder (including without any limitation any taxes and compulsory payments, such as National Insurance Institute and health tax payments), shall be borne solely by the Award Holder. The Company and/or its Affiliates, and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Award Holder shall agree to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Award Holder.

8.2. The Company or any of its Affiliates, and the Trustee may make such provisions and take such steps as it/they may deem necessary or appropriate for the withholding of all taxes required by law to be withheld with respect to Awards granted under the Plan and the exercise/vesting, sale, transfer or other disposition thereof, including, but not limited, to (i) deducting the amount so required to be withheld from any other amount (or Shares issuable) then or thereafter to be provided to the Award Holder, including by deducting any such amount from an Award Holder's salary or other amounts payable to the Award Holder, to the maximum extent permitted under law; and/or (ii) requiring the Award Holder to pay to the Company or any of its Affiliates the amount so required to be withheld; and/or (iii) withholding otherwise deliverable Shares having a Fair Market Value equal to the minimum amount statutorily required to be withheld; and/or (iv) causing the exercise and sale of any Awards or Shares held by on behalf of the Award Holder or selling a sufficient number of such Shares otherwise deliverable to the Award Holder through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld either through a voluntary sale or through a mandatory sale arranged by the Company (on the Award Holder's behalf pursuant to the Award Holder's authorization as expressed by acceptance of the Award under

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the terms herein), to the extent permitted by applicable law or pursuant to the approval of the ITA. In addition, the Award Holder shall be required to pay any amount (including penalties) that exceeds the tax to be withheld and transferred to the tax authorities, pursuant to applicable tax laws, regulations and rules.

8.3. The Company does not represent or undertake that an Award shall qualify for or comply with the requisites of any particular tax treatment (such as the 102 Capital Gains Track), nor shall the Company, its assignees or successors be required to take any action for the qualification of any Award under such tax treatment. The Company shall have no liability of any kind or nature in the event that, as a result of application of applicable law, actions by the Trustee or any position or interpretation of the ITA, or for any other reason whatsoever, an Award shall be deemed to not qualify for any particular tax treatment.

8.4. With respect to Non-Trustee Awards, if the Eligible 102 Award Holder ceases to be employed by the Company or any Affiliate, the Eligible 102 Award Holder shall extend to the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of Shares to the satisfaction of the Company, all in accordance with the provisions of Section 102 and the Rules.

8.5. The Company and/or when applicable, the Trustee shall not be required to release any Share certificate to an Israeli taxpayer Award Holder until all required payments have been fully made. In the event that the Company, or its Affiliates, or the Trustee, as applicable, is uncertain as to the sum of the full tax payment due or which is subject to withholding, the Company or the Trustee, as applicable, may refuse to release the Shares until such time as the ITA verifies the sum of the full tax payment which is due, and the Award Holders shall not have any claims in connection with such refusal. In addition, the Company shall not be obligated to honor the exercise or vesting of an Award by or on behalf of an Award Holder until all tax consequences (if any) arising from the exercise or vesting of such Award and/or sale or disposition of Shares and/or Award are resolved in a manner reasonably acceptable to the Company.

8.6. THE AWARD HOLDER IS STRONGLY ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING, EXERCISING OR DISPOSING ANY AWARD IN LIGHT OF HIS OR HER PARTICULAR CIRCUMSTANCES. THE COMPANY DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE THE AWARD HOLDER ON SUCH MATTERS, WHICH SHALL REMAIN THE SOLE RESPONSIBILITY OF THE AWARD HOLDER.

ADJUSTMENTS OF AWARDS UNDER THIS APPENDIX

9.1. Distribution of Bonus Shares. Notwithstanding the provisions of Section 13.3 of the Plan, in the event that the Company distributes bonus shares, the Exercise Price of Awards granted under this Appendix that are outstanding as of the record date of such distribution (hereinafter in this Section 9.1, the "Record Date") shall not be adjusted; however, the number of Shares covered by each Outstanding Award and the number of Shares which have been authorized for issuance under the Plan but as to which no Options or other Award have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option or other Award, shall be proportionately adjusted to the increase in the number of issued Shares, such that the number of Shares underlying the relevant

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Outstanding Award shall increase by the proportionate number of bonus shares (of the same class which was distributed to the other shareholders in the applicable distribution of bonus shares) to which the Award Holder would have otherwise been entitled had the exercise of the Outstanding Award taken place immediately prior to the distribution of the bonus shares. Bonus shares distributed pursuant to this Section 9.1 shall be subject to and in accordance with the terms of any applicable ruling issued by the ITA with respect to 102 Capital Gains Track Awards, to the extent required and subject to any legend or restriction applicable to the holders of bonus shares for which this adjustment was applied. All bonus shares to be issued by the Company, if any, with regard to Shares issued pursuant to the exercise/settlement of 102 Trustee Awards, while held by the Trustee, shall be registered in the name of the Trustee; and all provisions applying to such Shares shall apply to bonus shares issued by virtue thereof, if any, mutatis mutandis. Said bonus shares shall be subject to the Required Holding Period of the Shares by virtue of which they were issued.

For purposes of this Section 9.1, the term “Outstanding Awards” shall mean Awards granted prior to the Record Date, which have not been exercised or vested (as applicable) into Shares prior to or on the Record Date.

9.2. Rights Issue. Notwithstanding the provisions of Section 13.3 of the Plan, in the case of a rights issue made by the Company to its securities holders, the number of Shares covered by Awards granted under this Appendix as of the record date of such distribution (hereinafter in this Section 9.2, the “Record Date”) shall be proportionately and equitably adjusted so as to maintain through such an event the proportionate equity portion represented by the rights issue, such that the number of Shares underlying the relevant Outstanding Award shall be proportionately adjusted to the benefit component underlying the rights issuance as represented by the difference between the closing price of the Company’s shares on the stock exchange on the last trading day prior to the “ex-rights” day and the base price of the Company’s shares on the stock exchange following the “ex-rights” day. This adjustment shall be subject to and in accordance with the terms of any applicable ruling issued by the ITA with respect to 102 Capital Gains Track Awards, to the extent required.

For purposes of this Section 9.2, the term “Outstanding Awards” shall mean Awards granted prior to the Record Date, which have not been exercised or vested (as applicable) into Shares prior to or on the Record Date.

9.3. Dividends. Notwithstanding the provisions of Section 13.3 of the Plan, in the event of a distribution of cash dividend or in kind dividend to the Company’s shareholders (including by way of court approved distribution pursuant to an applicable statute), The Exercise Price of Awards granted under this Appendix that are outstanding as of the record date of such distribution of a dividend in cash or in kind (hereinafter in this Section 9.3, the “Record Date”), shall be adjusted, such that the Exercise Price of the Outstanding Awards shall be decreased by the gross dividend amount per Share (or its monetary value in the event of a dividend in kind). This adjustment shall be subject to and in accordance with the terms of any applicable ruling issued by the ITA with respect to 102 Capital Gains Track Awards, to the extent required. In no event will the Exercise Price of the Awards outstanding as of the Record Date be adjusted to a price lower than the minimum Exercise Price set forth in applicable

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law. Except as expressly provided herein, no distribution of a dividend in cash or in kind shall affect, and no adjustment thereof shall be made, with respect to the number of Shares subject to an Award.

For purposes of this Section 9.3, the term “Outstanding Awards” shall mean Awards granted prior to the Record Date, which have not been exercised into Shares prior to or on the Record Date.

10. SECURITIES LAWS

All Awards hereunder shall be subject to compliance with the Israeli Securities Law, 1968, and the rules and regulations promulgated thereunder.

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SCHEDULE C
EXECUTIVES & DIRECTORS COMPENSATION POLICY

I. OVERVIEW:

DEFINITIONS

"Company" means Shelfie-Tech Ltd.

"Compensation Committee" means a compensation committee satisfying the requirements of the Law.

"Controlling Shareholder Under the Israeli Companies Law" means a Shareholder with the ability to direct the activities of the Company, other than by virtue of being a director or holding any other position with the Company. A shareholder is presumed to be a Controlling Shareholder if he holds 50.0% or more of the "means of control" in the Company. The term "means of control" is defined under the Israeli Securities Law as voting rights in the Company's general meeting or the right to appoint the Directors of the Company or its general manager. With respect to certain matters, a Controlling Shareholder is deemed to include a shareholder that holds 25.0% or more of the voting rights in a public company if no other shareholder holds more than 50.0% of the voting rights in such company.

"Equity Value" means the value of the total annual Equity Based Components, valued using the same methodology utilized in the Company's financial statements.

"Executive" means the Office Holder, excluding a director.

"Law" means the Israeli Companies Law 5759-1999 and any regulations promulgated under it, as amended from time to time.

"Office Holder" means Director, CEO, and any senior executive directly subordinate to the CEO all as defined in section 1 of the Law.

"Terms of Office and Employment" means terms of office or employment of an Executive or a Director, including the grant of an exemption, an undertaking to indemnify, indemnification or insurance, Separation Package, and any other benefit, payment or undertaking to provide such payment, granted in light of such office or employment, all as defined in the Law.

"Total Cash Compensation" means the total annual cash compensation of an Executive, which shall include the total amount of: (i) the annual base salary; and the annual cash target incentive (Target MBO as defined in section 9 below).

The term "base salary" only includes the gross monthly salary. All other components are excluded, including any variable or accompanying salary components (if applicable); for example, various bonuses, company car usage or allowance, company telephone usage or allowance, reimbursement of expenses, etc., social security rights, and accompanying salary benefits (including Company

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contributions towards, officers' insurance policies, pension funds, study funds, vacation days, convalescence pay, sick days, etc.)

2. GLOBAL STRATEGY GUIDELINES

2.1. Our Corporation is a retail technology company, operating in a competitive global market.

2.2. Our vision and business strategy is directed towards growth, profitability, innovation, and customer focus, all with a long term perspective.

2.3. We strongly believe that our business success is much reliant on the excellence of our human resources through all levels. In particular we believe that the company's ability to achieve its goals require us to recruit, motivate and retain high quality and experienced leadership team and directors.

2.4. Therefore, we believe in creating a comprehensive, customized compensation policy for our Office Holders (the "Policy"), which shall enable us to attract and retain highly qualified senior leaders. Moreover, the Policy shall motivate our senior leaders to perform to the full extent of their abilities and to achieve ongoing targeted results in addition to a high-level business performance in the long term, aligned with our business strategy.

2.5. The Policy sets forth our philosophy regarding the Terms of Office and Employment of our Office Holders and is designed to allow us to be responsive to marketplace changes with respect to compensation levels and pay practices.

2.6. The Policy is tailored to ensure a compensation which balances performance targets and time horizons through rewarding business results, long-term performance and strategic decisions.

2.7. The policy provides our Compensation Committee and our Board of Directors with adequate measures and flexibility, to tailor each of our Executive's compensation package, based among others on geography, business tasks, role, seniority, and skills.

2.8. The Policy shall provide the Board of Directors with guidelines as to exercising its discretion under the Company's equity plans.

2.9. The Policy is guided by the applicable principles set forth in the Law.

3. PRINCIPLES OF THE POLICY

3.1. The Policy shall guide the Company's management, Compensation Committee and Board of Directors with regard to the Office Holders' compensation.

3.2. The Policy shall be reviewed at least annually by the Compensation Committee and the Board of Directors, to ensure its compliance with applicable laws and regulations as well as market practices, and its conformity with the Company's targets and strategy. As part of this review, the Board of

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Directors will analyze the appropriateness of the Policy in advancing achievement of its goals, considering the implementation of the Policy by the Company during previous years.

3.3. Any proposed amendment to the Policy shall be brought up to the approval of the Shareholders of the Company and the Policy as a whole shall be re-approved by the Shareholders of the Company at least every three years, or as otherwise required by Law.

3.4. Our Policy shall be global, but its implementation shall be aligned with local practices and legal requirements and with our intention to treat our Executives fairly and consistently on a global basis.

3.5. The approval procedures of Terms of Office and Employment as well as back-up data shall be documented in detail and such documentation shall be kept in the Company’s offices for at least seven years following approval.

3.6. The compensation of each Office Holder shall be taxed and subject to mandatory or customary deductions and withholdings, in accordance with the applicable local laws.

3.7. Our CEO shall be entitled to determine that non-material changes (i.e. not exceeding an amount equal to two monthly base salaries for such calendar year) will be made to the compensation terms of such Executives subordinate to our CEO, without seeking the approval of the Compensation Committee. If an Office Holder is either a Controlling Shareholder or a relative of a Controlling Shareholder under the Israeli Companies Law, additional approvals may be required by law.

COMPENSATION COMMITTEE INDEPENDENCE

Our Compensation Committee will be comprised of at least three members of our Board of Directors. Each member of our Compensation Committee must meet the independence requirements established under applicable law and/or the applicable rules of any market on which the shares of the Company are traded.

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II. EXECUTIVE COMPENSATION:

When examining and approving Terms of Office and Employment, the Compensation Committee and Board members shall review the following factors and shall include them in their considerations and reasoning:

1.1. Executive’s education, skills, expertise, professional experience and specific achievements.

1.2. Executive’s role, scope of responsibilities and location.

1.3. Executive’s previous compensation.

1.4. The Company’s performance and general market conditions.

1.5. The ratio between the cost of an Executive’s compensation, including all components of the Executive’s Terms of Office and Employment, and the cost of salary of the Company’s employees in particular with regard to the average and median ratios, and the effect of such ratio on work relations inside the Company as defined by the Law.

1.6. Per request of the Compensation Committee or the Board- Comparative information, as applicable, as to former Executives in the same position or similar positions, as to other positions with similar scopes of responsibilities inside the Company, and as to Executives in peer companies globally spread. The peer group shall include not less than 5 global companies similar in parameters such as total revenues, market cap, industry and number of employees. The comparative information, as applicable, shall address the base salary, target cash incentives and equity and will rely, as much as possible, on reputable industry surveys, taking into consideration for each Executive, among other parameters, the compensation levels and practices applicable to such Executives location.

The compensation of each Executive shall be composed of, some or all, of the following components:

i. Fixed components, which shall include, among others: base salary and benefits;
ii. Variable components, which may include: cash incentives and equity based compensation.
iii. Separation Package;
iv. Directors & Officers (D&O) Insurance, indemnification; and
v. Other components, which may include: change in control payment, Sign-on bonus, relocation benefits, studies opportunities and Leave of Absence, etc.

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The plan for Executives compensation mix shall comprise of, some or all, of the following components:

Compensation Component	Purpose	Compensation Objective Achieved
Annual base salary	Provide annual cash income based on the level of responsibility, individual qualities, past performance inside the Company, and past experience inside and outside the Company.	- Individual role, scope and capability based compensation.
- Market competitiveness.
Performance-based cash incentive compensation	Motivate and incentivize individual towards reaching Company, unit and individual’s periodical and long-term goals and targets.	- Reward periodical accomplishments.
- Align Executives’ objectives with Company, unit and individual’s objectives.
- Market competitiveness.
Long-term equity-based Compensation	Align the interests of the individual with the Shareholders of the Company, by creating a correlation between the Company’s success and the value of the individual holdings.	- Company performance based compensation.
- Reward long-term objectives.
- Align individual’s objectives with shareholders’ objectives.
- Market Competitiveness.

The compensation package shall be reviewed with each Executive once a year, or as may be required from time to time.

FIXED COMPENSATION

5. BASE SALARY

5.1. Our Compensation Committee and Board of Directors shall determine, from time to time, the target percentile, and/or range of percentiles, that our Executives’ base salary shall meet, with respect to the peer group companies as aforesaid.

5.2. The base salary is intended to provide annual cash income based on the level of responsibility, individual qualities, past performance inside the Company, and past experience inside and outside the Company.

5.3. Each Company Executive may be entitled to receive a base salary (or equivalent) of up to US$ 30,000 per month (based on at least 50% full time equivalent).

5.4. The Company’s CEO may be entitled to receive a base salary (or equivalent) of up to US$ 40,000 per month (based on at least 50% full time equivalent).

BENEFITS

6.1. Benefits granted to Executives shall include any mandatory benefit under applicable law, as well as:

6.1.1. Pension plan/ Executive insurance as customary in each territory.

6.1.2. Additional benefits may be offered as part of the general employee benefits package (Private medical insurance disability and life insurance, transportation (including Company car), communication & media, Israeli education fund, etc.) – in accordance with the local policy of the Company.

6.2. An Executive will be entitled to sick days and other special vacation days (such as recreation days), as required under local standards and practices.

6.3. An Executive will be entitled to vacation days (or redemption thereof), in correlation with the Executive’s seniority and position in the Company (generally up to 28 days annually), subject to the minimum vacation days requirements per country of employments well as the local national holidays.

VARIABLE COMPONENTS

7.1. When determining the variable components as part of an Executive’s compensation package, the contribution of the Executive to the achievement of the Company’s goals, revenues, profitability and other key performance indicators (“KPI”) shall be considered, taking into account, among others, the Company’s long-term perspective and the Executive’s position.

7.2. Variable compensation components shall be comprised of cash components which shall be mostly based on measurable criteria and on equity components, all taking into consideration a long-term perspective.

7.3. Our Board of Directors shall be authorized to reduce or cancel any cash incentive under circumstances which the Board of Directors deems, at its absolute discretion, to be exceptional.

CASH INCENTIVES

8.1. Management by Objectives (“MBO”) Plan

8.1.1. MBOs are incentive cash payments to the Executives that vary based on the Company and unit’s performance and on their individual performance and contribution of the Executive to the Company.

8.1.2. For each calendar year, our Compensation Committee and Board of Directors may adopt an MBO plan, which will set forth, for each Executive, targets, a corresponding target MBO payment (which shall be referred to as the “Target MBO”), and the rules or formula for calculation of the MBO payment once actual achievements are known. If an Office Holder is either a Controlling Shareholder or a relative of a Controlling

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Shareholder under the Israeli Companies Law, additional approvals may be required by law.

8.1.3. The Compensation committee and Board of Directors may include in the MBO plan predetermined thresholds, caps, multipliers, accelerators and decelerators to correlate an Executive’s MBO payments with actual achievements.

8.1.4. The Target MBO of each Executive, except for the CEO and the Chairman of the Board of Directors, shall not exceed 6 monthly salaries for each Executive.

8.1.5. The Target MBO of the CEO and the Chairman of the Board of Directors shall not exceed 8 monthly salaries for each of the above.

8.1.6. The annual MBO payment for each Executive in a given year shall be capped as determined by our Board of Directors, but in no event shall exceed 200% of such Executive’s Target MBO.

8.1.7. At least 60% of the targets shall be measurable. Such objective targets may include, among others, one or more of the following, with respect to the Executive:

Company’s / Unit’s Revenues
Company’s / Unit’s Operating Income
Pre-tax profits above previous fiscal year
Fundraising goals
Budget coherence and cost savings
KPIs
The achievement of predefined targets
Joint ventures and other strategic partnerships

A non-substantial portion of up to 40% of the targets may be based on non-measurable criteria. If and to the extent permissible pursuant to the Law, with respect to all Executives except our CEO, our Compensation Committee and our Board of Directors may increase the portion of targets that are based on non-measurable criteria above the rate of 20%, up to the maximum portion permissible pursuant to the Law, but not to more than 50%. Such non-measurable criteria may be determined by our CEO with the approval of our Compensation Committee and our Board of Directors. If an Office Holder is either a Controlling Shareholder or a relative of a Controlling Shareholder under the Israeli Companies Law, additional approvals may be required by law.

8.1.8. The objective targets, as well as their weight, shall be determined in accordance with the Executive’s position, the Executive’s individual roles, and the Company and Unit’s

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long term and short term targets. The measurable objective targets shall include one or more financial target, weighing at least 40% of the Target MBO.

8.1.9. In the event that the Company’s targets are amended by the Board of Directors during a particular year, the Board of Directors shall have the authorization to determine whether, and in which manner, such amendment shall apply to the MBO plan. If an Office Holder is either a Controlling Shareholder or a relative of a Controlling Shareholder under the Israeli Companies Law, additional approvals may be required by law.

8.1.10. The Board of Directors shall annually determine a threshold with respect to the Company’s objective targets under which no MBO payments shall be distributed.

8.1.11. Adjustment to the Company and/or Unit objective targets may be made, when applicable, following major acquisitions, divesture, organizational changes or material change in the business environment.

8.2. Special Payments

Our Remuneration Committee and our Board of Directors may approve, from time to time, with respect to any Executive, if they deem appropriate under special circumstances, or in case of a special contribution to, or achievement for the Company, including in cases of retention or attraction of an Executive, M&A events, major financing events and other major company achievements, the grant of a onetime cash or equity incentive, of up to 50% of the Executive’s annual base salary.

9. EQUITY BASED COMPENSATION

9.1. The Company shall grant its Executives, from time to time, equity based compensation, which may include any type of equity, including without limitation, any type of shares, options, restricted share units and restricted shares (restricted share units and restricted shares shall each be referred to herein as “RSUs”), which may be subject to either time-based vesting only (“TRSUs”) or subject to vesting based on both time and performance criteria (“PRSUs”), share appreciation rights or other shares based awards (“Equity Based Components”), under any existing or future equity plan (as may be adopted by the Company), and subject to any applicable law. Equity Based Components may include any equity in a subsidiary of the Company, which Equity Value shall be determined by an independent appraisal and approved by the Board of directors.

9.2. The Company believes that it is not in its best interest to limit the exercise value of Equity Based Components.

9.3. Equity Based Components provide incentives in a long-term perspective and shall be granted under the most recent equity plan of the company that defines the terms of these grants to all Company’s employees. Our Equity Based Components (including PRSU’s) shall be in accordance with

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and subject to the terms of our existing or future equity plan and shall vest gradually in installments, throughout a period which shall not be shorter than 3 years with at least a 1-year cliff.

9.4. Equity Based Components may consist of a combination of any type of equity.

9.5. In determining the Equity Based Components granted to each Executive, our Compensation Committee and our Board shall consider the factors specified in section II(1) hereinabove, and in any event its Equity Based Components granted to an Executive in a single calendar year shall not exceed the annual value of 12 months salaries based on the maximum amount that may be granted to as per Section 5 above. Notwithstanding the foregoing, during a single calendar year in which one of the following special circumstances has occurred: (a) the hiring a new Executive who loses the rights to significant equity or other variable compensation as a result of joining the Company; (b) hiring or retaining an Executive who has a unique value for the future business of the Company; or (c) special retention of Executives in relation to a certain M&A event (each, a "Special Event"), then each of the Executives may be granted additional Equity Based Components equal to 18 months salary.

The foregoing in this Section 9.5 shall constitute the cap under the Policy for all equity awards to the Company's Executives.

SEPARATION PACKAGE

10.1. The following criteria shall be taken into consideration when determining Separation Package: the duration of employment of the Executive, the terms of employment, the Company's performance during such term, the Executive's contribution to achieving the Company's goals and revenues and the retirement's circumstances.

10.2. Other than payments required under any applicable law, local practices, vesting of outstanding options, transfer or release of pension funds, manager's insurance policies etc. - the maximum Separation Package of each Executive shall not exceed the value of a one-time Total Cash Compensation of such Executive's. Separation Package shall include any payment and/or benefit paid to an Executive in connection with such Executive's separation, all as defined in section 1 of the Law.

OTHERS

11.1. Relocation – additional compensation per local practices and law may be granted to an Executive under relocation circumstances. Such benefits shall include reimbursement for out of pocket one time payments and other ongoing expenses, such as housing allowance home leave visit, etc., in accordance with the Company's relocation practices, or otherwise approved as relocation expenses by the Compensation Committee and Board of Directors. The Compensation Committee and Board of Directors may, if they deem it is appropriate under the circumstances, provide compensation for

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additional general relocation expenses, in an amount that does not exceed 15% of the annual base salary.

11.2. Leave of absence – an Executive shall be treated in accordance with pay practices in the relevant country, which may also have an effect on base salary and MBO payments, and vesting of equity in accordance with the Company’s Equity plans.

12. COMPENSATION RECOVERY ("CLAWBACK")

12.1. In the event of a restatement of the Company’s financial results, we shall seek from our Office Holders reimbursement of any bonus compensation or performance-based equity compensation made due to erroneous restated data, with regards to each Office Holder’s Terms of Office and Employment that would not otherwise have been paid. The reimbursement shall be limited to such payments made during the 3-year period preceding the date of restatement. The above shall not apply in case of restatements that reflect the adoption of new accounting standards, transactions that require retroactive restatement (e.g., discontinued operations), reclassifications of prior year financial information to conform with the current year presentation, or discretionary accounting changes. The above shall not derogate from any mandatory claw-back requirements pursuant to any applicable law, rule and regulations.

12.2. To the extent permitted pursuant to any applicable law, rule or regulation, our Compensation Committee and Board of Directors shall be authorized subject to any applicable law and regulations, not to seek recovery to the extent that (i) to do so would be unreasonable or impracticable or; (ii) there is low likelihood of success under governing law versus the cost and effort involved;

12.3. Our Compensation Committee and Board intend to adopt a separate clawback policy, that shall be compliant with any “clawback” or other similar provisions regarding disgorging of profits imposed on our Office Holders by virtue of applicable securities laws and/or stock-market-rules (the “Clawback Policy”), provided however, that the terms of such Clawback Policy shall be no less stringent with our Office Holders than the existing terms set forth above in Sections 12.1 and 12.2. No amendments to, or further corporate approvals in connection with, this Compensation Policy will be required in connection with the adoption of the Clawback Policy.

III. DIRECTOR REMUNERATION:

Our non-executive Directors shall be entitled to remuneration composed of cash compensation which includes annual fee and meeting participation fee, as well as equity based compensation, as an incentive for their contribution and efforts as directors of the Company.

In setting the compensation of our non-executive Directors, the Compensation Committee shall consider, among others, parameters it deems necessary in order to attract and retain highly skilled and experienced Directors.

Executive Directors shall not be entitled to any remuneration with respect to their service as directors of the Company, and shall only be entitled to the compensation provided to them in their capacity as Executives.

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CASH COMPENSATION

1.1. The Company’s non-executive directors may be entitled to receive an equal cash fee per year and per meeting in the amount equal to up to 2 times the fixed amount under the Law.

1.2. The Chairman of the Board of Directors (if not an executive), the Vice Chairman of the Board of Directors and/or the Chairman of any Committee of the Board of Directors may be entitled to receive a cash fee per year and per meeting of up to 3 times the fixed amount under the Law.

1.3. The Chairman of the Board of Directors shall be entitled to receive a cash fee per year of up to US$ 80,000 (based on 50% full time equivalent).

1.4. The Company’s non-executive directors shall be reimbursed for their reasonable expenses incurred in connection with attending meetings of the Board of Directors and of any Committees of the Board of Directors.

EQUITY BASED COMPENSATION

2.1. Each of the Company’s non-executive directors shall be entitled to receive equal equity-based compensation per year, which value shall not exceed USD 70,000.

2.2. The Chairman of the Board of Directors, Vice Chairman of the Board of Directors and/or the Chairman of any Committee of the Board of Directors shall be entitled to receive equity-based compensation per year of to up to USD 250,000.

2.3. The equity-based compensation of each of the Company’s non-executive directors shall vest in 4 quarterly installments.

2.4. Equity based compensation granted to our non-executive directors shall be granted under the existing or future equity plan of the Company.

2.5. The Company may repay Director’s reasonable travel, hotel and other expenses expended by them in attending board meetings and performing their functions as directors of the Company.

EXTERNAL DIRECTORS COMPENSATION

3.1. The compensation of our external directors, if any, shall be determined and capped in accordance with the applicable laws and regulations (currently the comparative compensation mechanism specified in section 8a-8b of the Companies Regulations (Rules regarding Compensation and Expense Reimbursement of External Directors) – 2000).

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IV. INDEMNIFICATION, EXCULPATION AND INSURANCE:

The Office Holders shall be entitled to the same directors and officer’s indemnification of up to the maximum amount permitted by law however in no event shall such amount be greater than the higher of (a) twenty five percent (25%) of the shareholders’ equity at the time of the indemnification, and (b) $5,000,000, to an exculpation, in accordance with the terms and conditions approved by the Company and to directors and officers liability insurance as shall be approved by the Compensation Committee, Board of Directors and our shareholders, all in accordance with any applicable law and the Company’s articles of association.

We shall be authorized to provide our directors and officers with a liability insurance policy providing a liability coverage of up to USD 15,000,000 (including Side A Difference in Conditions). The premium levels per annum shall be derived from the coverage limitations under this Compensation Policy and be determined by our Compensation Committee in accordance with market conditions at the time the liability insurance is purchased, and provided they shall have no material impact on the profitability, property or financial obligations of the Company.

Our Compensation Committee shall be authorized, with respect to a specific material transaction or a series of related transactions, constituting together a material transaction - to the extent such insurance coverage is required in the opinion of our Compensation Committee, in order to provide adequate coverage for our directors and officers with respect to such a transaction - to purchase coverage in amounts of up to 3 times the then existing limit of coverage, with costs of up to 3 times the then existing limit of premium amounts; in both (i) and (ii) - without an additional shareholders’ approval, if and to the extent permitted under the Law.

1. GENERAL

1.1. The Compensation Committee and our Board of Directors shall be authorized to approve a deviation of up to 15% from any limits, caps or standards detailed in this Policy, and such deviation shall be deemed to be in alignment with this policy.

1.2. This Policy is set as guidance for the Company’s relevant organs, with respect to matters involving the compensation of its Office Holders, and is not intended to, and shall not, confer upon any of the Office Holders, any rights with respect to the Company.

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SCHEDULE D

AUDIT COMMITTEE CHARTER

Purpose

The Audit Committee (the “Audit Committee” or the “Committee”) is a committee of the board of directors (the “Board of Directors” or the “Board”) of Shelfie-Tech Ltd. (the “Company”). Its primary function is to assist the Board in fulfilling its oversight responsibilities by evaluating and making recommendations to the Board as appropriate with respect to:

financial reporting;
the external auditors, including performance, qualifications, independence, and their audit of the Company’s financial statements;
the performance of the Company’s internal audit function;
internal controls and disclosure controls;
financial risk management;
the Company’s Code of Business Conduct and Ethics (the “Code”); and
related party transactions.

The Audit Committee will also have authority to review and, in its discretion, approve certain matters, in accordance with and within the limitations prescribed by this Charter.

The Audit Committee’s primary function is to assist the Board of Directors in fulfilling its responsibilities. It is, however, the Company’s management which is responsible for preparing the Company’s financial statements and it is the Company’s external auditors who are responsible for auditing those financial statements.

Composition, Procedures and Organization

The Committee shall consist of at least three members of the Board of Directors.
All External Directors (as such term is defined under applicable Israeli law) will serve as members of the Audit Committee. At least one of the External Directors will qualify as having “accounting and financial expertise” under the Israeli Companies Law 5759-1999, as amended (the “Israeli Companies Law”). A director with “accounting and financial expertise” (under the Israeli Companies Law) is a director whose education, experience and skills qualify him or her to be highly proficient in understanding business and accounting matters and to thoroughly understand the company’s financial statements and to stimulate discussion regarding the manner in which financial data are presented.

"Independent Director" (under foreign law) which serves as a member of the audit committee, and not necessarily by an External Director. In such event, all external directors of such a company shall be directors with at least professional competence.

The following person shall not be allowed to be members of the Audit Committee: (i) the chair of the Board; (ii) a “controlling shareholder” (as such term is defined under applicable Israeli law) of the Company; (iii) a relative of a controlling shareholder; (iv) a director employed by or providing services on a regular basis to the Company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or (v) a director who derives most of his or her income from a controlling shareholder (the “Non-Permitted Members”).
The majority of Committee members shall be independent (as defined in the Israeli Companies Law). In general, an “independent director” under the Companies Law is defined as either an External Director or as a director who meets the following criteria:
he or she meets the qualifications for being appointed as an External Director, except for the requirement that the director (i) be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed for trading outside of Israel) and (ii) have accounting and financial expertise or professional qualifications; and
he or she has not served as a director of the company for a period exceeding nine consecutive years. For this purpose, a break of less than two years in his or her service as a director shall not be deemed to interrupt the continuity of the service.
At least one (1) member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices applicable to the Company. For the purposes of this Charter, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.
Each member of the Committee, who is not an External Director, shall be appointed by the Board.
The chair of the Audit Committee must be one of the Company’s External Directors, on the recommendation of the Corporate Governance and Nominating Committee, and shall hold office for a term of three years and may be elected for additional three-year terms, subject to required shareholder approval.
Any member of the Committee, who is not an External Director, may be removed or replaced at any time by the Board and shall cease to be a member of the Committee upon ceasing to be a director.
The Board may fill vacancies on the Committee of Board members who are not External Directors, by appointment from among its members. If and whenever a vacancy shall exist on

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the Committee, as long as the Committee is comprised of at least three members and all of the External Directors are its members and most of its members are independent, the remaining members may exercise all their powers so long as a quorum remains in office.

The quorum for meetings shall be a majority of the members of the Committee, present in person or by telephone or other telecommunication device that permits all persons participating in the meeting to speak and to hear each other, provided however, that such quorum include a majority of independent directors under Israeli law of whom at least one is an External Director.
The Committee shall have access to such officers and employees of the Company and to the Company's external auditors, and to such information respecting the Company, as it considers to be necessary or advisable in order to perform its duties and responsibilities.
Meetings of the Committee shall be conducted as follows:

a. the Committee shall meet at such times and at such locations as may be requested by the chair of the Committee. Any member of the Committee may request a meeting of the Committee; and

b. management representatives may be invited to attend all meetings except private sessions with the external auditors.

c. Under the Israeli Companies Law, Non-Permitted Members shall not attend audit committee's meetings or take part in its decisions, unless the chairperson of the audit committee has determined that such person is required for the presentation of a certain matter. Nevertheless, an employee who is not a controlling shareholder or a relative thereof may be present at the discussion part only, pursuant to the audit committee's request, and the company's legal counsel and secretary, who are not controlling shareholders or relatives thereof, may be present during both discussion and decision-making parts — pursuant to the committee's request.

The internal auditors and the external auditors shall have a direct line of communication to the Committee through its chair and may bypass management if deemed necessary. The Committee, through its chair, may contact directly any employee in the Company as it deems necessary, and any employee may bring before the Committee any matter involving questionable, illegal or improper financial practices or transactions.
The company's internal auditor will receive notices of Committee meetings and will be allowed to participate in them. The external auditors will be invited to any Committee meetings dealing with the financial statements of the Company.

Roles and Responsibilities

The overall duties and responsibilities of the Committee shall be as follows:

a. to assist the Board in the discharge of its responsibilities relating to the Company's accounting principles, reporting practices and internal controls and its approval of

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the Company’s annual and quarterly consolidated financial statements and related financial disclosure;

b. to establish and maintain a direct line of communication with the Company’s internal and external auditors and assess their performance;

c. Review and assess the adequacy of the Company’s corporate governance system annually and report to the Board, which report shall include any recommendations regarding the Company’s corporate governance practices which the Committee deems appropriate.

d. Review the disclosure of the Company’s system of governance to be contained in the Company’s Annual Information Form and/or management information circular to ensure it constitutes full and complete disclosure of such system in response to legal and regulatory requirements.

The duties and responsibilities of the Committee as they relate to the external auditors shall be as follows:

a. to recommend to the Board a firm of external auditors to be engaged by the Company, and to verify the independence of such external auditors to recommend to the Board the fees and other compensation to be paid to the external auditors.

b. to review with the external auditors, upon completion of their audit:

(i) contents of their report;

(ii) scope and quality of the audit work performed;

(iii) adequacy of the Company’s financial and auditing personnel;

(iv) co-operation received from the Company’s personnel during the audit;

(v) internal resources used;

(vi) significant transactions outside of the normal business of the Company;

(vii) significant proposed adjustments and recommendations for improving internal accounting controls, accounting principles or management systems; and

(viii) the non-audit services provided by the external auditors;

c. to discuss with the external auditors the quality and not just the acceptability of the Company’s accounting principles; and

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The duties and responsibilities of the Committee as they relate to the internal control procedures of the Company are to:

a. review the appropriateness and effectiveness of the Company’s policies and business practices which impact on the financial integrity of the Company, including those relating to internal auditing, insurance, accounting, information services and systems and financial controls, management reporting and risk management;

b. periodically review the Company’s financial and auditing procedures and the extent to which recommendations made by the internal audit staff or by the external auditors have been implemented.

Internal audit

The Committee will review the internal auditor’s work program performance, examine the company’s internal control structure and processes and determine whether the internal auditor has the requisite tools and resources required to perform his or her role.

Related Party Transactions

a. Determine with respect to transactions with related parties (as such term is defined under applicable Canadian and Israeli laws), including office holders and the controlling shareholder (if any), if such transactions are substantial actions (i.e. an act that is likely to materially affect the Company’s profitability, assets or liabilities) or extraordinary transactions (i.e. a transaction that is not in the Company’s ordinary course of business, not on market terms or that is likely to have a material impact on the Company’s profitability, assets or liabilities) and may determine once a year, in advance, criteria for such determination;

b. Determine with respect to extraordinary (and non-extraordinary) transactions with the controlling shareholder, the requirement to conduct a competitive process, or other procedures to be conducted prior to entry into such transactions;

c. Review and approve or disapprove certain related-party transactions;

d. Determine the procedure for approval of transactions with the controlling shareholder, which are not negligible transactions.

The Committee is also charged with the responsibility to:

a. review the Company’s quarterly statements of earnings, including the impact of unusual items and changes in accounting principles and estimates and report to the Board with respect thereto;

b. review and approve the financial sections of:

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(i) the annual report to Shareholders;
(ii) the annual information form, if required;
(iii) annual and interim MD&A
(iv) prospectuses;
(v) other public reports of a financial nature requiring approval by the Board, and report to the Board with respect thereto;

c. review regulatory filings and decisions as they relate to the Company’s consolidated financial statements;
d. review with management, the external auditors and, if necessary, with legal counsel, any litigation, claim or other contingency, including tax assessments that could have a material effect upon the financial position or operating results of the Company and the manner in which such matters have been disclosed in the consolidated financial statements; and
e. develop and recommend to the Board a set of corporate governance principles applicable to the Company, and to review those principles and, if the Committee deems appropriate, to recommend any changes to the Board for approval.
f. recommend to the Board such additional actions related to corporate governance matters as the Committee may deem necessary or advisable from time to time.

The Committee shall have the authority:
a. to engage independent counsel and other advisors as it determines necessary to carry out its duties,
b. to communicate directly with the internal and external auditors,
c. to perform any other activities consistent with this Charter, the Company’s by-laws or as delegated by the Board from time to time.
The foregoing list is not exhaustive. The Audit Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its responsibilities and duties or as may be required by applicable Canadian and Israeli Law.
The members and the Chair of the Committee shall be entitled to receive remuneration for acting in such capacity as approved by the compensation committee, the Board and general meeting, in that order. However, according to regulations promulgated under the Israeli Companies Law with respect to the remuneration of External Directors, the compensation

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committee and shareholder’s approval may be waived if the remuneration to be paid to the External Directors is between the fixed and maximum amounts set forth in the regulations.

Adopted: _____ __, 2024

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SCHEDULE E
DISCLOSURE AND INSIDER TRADING POLICY

PART I – APPLICATION OF THE POLICY & ADMINISTRATION

APPLICATION OF POLICY

This Disclosure and Insider Trading Policy (“Policy”) applies to Board Members, Officers, Employees and Contractors of the Corporation and its affiliates (if any). For a complete list, see Schedule “A” attached hereto. References in this Policy to “any person to whom this Policy applies” or similar references are intended to include persons in all of the groups described in Schedule “A”.

RESPONSIBILITY FOR THIS POLICY

A. Governance Committee. The Corporation has established a DCorporate Governance and Nominating Committee (the “Governance Committee”) consisting of three directors of the Corporation who have overall responsibility to administer this Policy. The composition of the Governance Committee may change from time to time and the Corporation will advise all persons to whom this Policy applies of any such changes.

B. Compliance Officer. The Corporation may also appoint a compliance officer (“Compliance Officer”) who will be responsible for the day to day administration of this Policy and monitoring and enforcing compliance with its provisions and procedures. The Compliance Officer may designate one or more individuals who may perform certain of the Compliance Officer’s duties in the event that the Compliance Officer is unable or unavailable to perform such duties.

C. Compliance with this Policy. All employees will be required to personally certify that they have read this Policy and agree to fully comply with its terms by signing the Form of Receipt and Acknowledgment attached to, and forming part of, this Policy. Employees will be required to make such a personal certification on an annual basis.

INDIVIDUALS WHO ARE AUTHORIZED TO SPEAK ON BEHALF OF THE CORPORATION

A. Authorized Spokespersons. Unless otherwise authorized by the Governance Committee, only the Chair of the Board of Directors (the “Board”), the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and, where necessary to comply with applicable securities laws, legal counsel to the Corporation (the “Authorized Spokespersons”) are authorized to initiate contacts with analysts, the media and investors or speak publicly regarding the Corporation.

B. Alternates. The Chair of the Board, the CEO and the CFO may, from time to time, designate in writing other Board Members, Officers, Employees and Contractors, or with the approval of the Governance Committee, any other person, to speak on behalf of the Corporation, as back-ups or to respond to specific inquiries.

C. Public Contacts. Any person to whom this Policy applies who is approached by the media, an analyst, investor or any other member of the public to comment on the affairs of the

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Corporation, must refer all inquiries to an Authorized Spokesperson and notify a member of the Governance Committee.

D. Distribution of this Policy throughout the Corporation. This Policy shall be distributed to all persons to whom it applies by the Governance Committee. The Governance Committee shall maintain a list of all persons to whom this Policy was distributed.

PART II - PROCEDURES RELATING TO DISCLOSURE

MATERIAL INFORMATION

A. Material Information. "Material information" consists of both "material facts" and "material changes". A "material fact" means a fact that would reasonably be expected to have a significant effect on the market price or value of the securities of the Corporation. A "material change" means a change in the business, operations or capital of the Corporation that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the Corporation and includes a decision to implement such a change if such a decision is made by the Board or by senior management of the Corporation who believe that confirmation of the decision by the Board is probable.

B. Notification. Any person to whom this Policy applies who becomes aware of information that has the possibility of being material information must immediately disclose that information to a member of the Governance Committee. Schedule "B" attached hereto lists examples of potentially material information. If an individual is in any doubt, then it is prudent to refer the matter to a member of the Governance Committee.

C. Immediate Disclosure. Material information is required to be disclosed to the public immediately. The Governance Committee, in consultation with the Board and others, as appropriate, shall determine what is deemed to be material information and the appropriate public disclosure. Disclosure must be corrected immediately if the Corporation subsequently learns that earlier disclosure by the Corporation contained a material error at the time it was given.

D. Dissemination. News releases disclosing material information will be transmitted to the CSE or any other exchange on which the Corporation's securities may be listed, relevant regulatory bodies and major news wire services that disseminate financial news to the financial press and to daily newspapers that provide regular coverage of financial news in Canada.

TIMELY DISCLOSURE

A. NI 51-102 and CSE Rules. The Corporation at all times will prepare all documents required by National Instrument 51-102 – Continuous Disclosure Obligations of the Canadian Securities Administrators; the CSE polices; and the rules of any other stock exchange on which the Corporation's shares are listed or posted for trading, to be prepared, disclosed, disseminated, or filed, including through SEDAR, and will make the disclosures and filings within the prescribed time limits.

B. Forward-Looking Information. If forward-looking information is to be disclosed, the Corporation shall observe the following requirements:

the Corporation shall include reasonable cautionary language identifying the forward-looking information as forward-looking;
the Corporation shall identify the material factors that could cause actual results to differ materially from a conclusion, forecast, or projection in the forward-looking information;
the Corporation shall include the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection; and
the Corporation shall not disclose forward-looking information unless there is a reasonable basis for the conclusion or the making of the forecast or projection set out in the forward looking information.

PROHIBITION ON SELECTIVE DISCLOSURE

A. What is Selective Disclosure? Selective disclosure, which is prohibited, occurs when a reporting issuer (i.e., a publicly traded Corporation, such as the Corporation) discloses material information to select individuals, such as analysts or institutional investors, that has not generally been disclosed to the public. The Governance Committee shall ensure that this Policy and its terms are adequately disseminated throughout the organization and, to the best of his/her abilities, to the appropriate parties affected by the prohibition.

B. Tipping. The Corporation and/or a person or a Corporation in a special relationship with the Corporation, must not inform, other than in the necessary course of business, another person or Corporation of material information with respect to the Corporation before the material information has been generally disclosed ("tipping").

C. Persons in a Special Relationship. Persons in a special relationship with the Corporation include:
- directors, officers, or employees of the Corporation;
- Insiders, affiliates or associates of the Corporation;
- a person or Corporation engaged in any business or professional activity with the Corporation;
- a person or Corporation that learns of material information about the Corporation while a director, officer, employee, Insider, affiliate or associate of the Corporation; and
- a person or Corporation that learns of material information about the Corporation from anybody else and knows, or reasonably should have known, that they are a person or Corporation in a special relationship.

D. Tipping Exception. There is an exception to the prohibition if selective disclosure is required in the necessary course of business. The necessary course of business exception would generally cover, among other examples, communications with:
- employees, officers and directors;

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lenders, legal counsel, auditors, financial advisors, underwriters and other professional advisors to the Corporation;
parties to negotiations; and
government agencies and non-governmental regulators.

GUIDELINE TO ENSURE COMPLIANCE WITH THE PROHIBITION ON SELECTIVE DISCLOSURE

A. Selective Disclosure to be Made in Accordance with this Policy. Any communication of material information to select groups or individuals such as analysts, institutional investors or industry participants that has not been generally disclosed to the public is prohibited or, if made, shall be made only in accordance with this Policy.

B. Communications to Market Participants and Review of Analysts' Reports. The Corporation is sensitive to the risks involved in private meetings or other forms of communications with analysts and other market participants. No person in a special relationship (including the Governance Committee and the Authorized Spokespersons) may communicate any information to any market participants, unless such information is already publicly disclosed, is not material information or is communicated pursuant to the necessary course of business exemption. In addition, the review of, and comments upon, any draft analysts' reports will be made or supervised by the Governance Committee, who will make sure that, by commenting on such reports, no material information not already disclosed to the public is communicated to the analysts. When reviewing analysts' reports, comments must be limited to identifying factual information that has been generally disclosed and that may affect an analyst's model and pointing out inaccuracies or omissions with respect to information that has been generally disclosed.

C. Unintentional Disclosure of Material Information. If it becomes apparent that the prohibition against selective disclosure has been violated, the Governance Committee or an Authorized Spokesperson shall immediately be informed and shall consult with legal counsel as to the necessary course of action. Pending the public release of material information, the Governance Committee shall contact the parties who have received the information and advise them that they have received material information, that it has not yet been generally disclosed and communicate to such parties that they have been placed in the position of a "special relationship" with the Corporation and, therefore, must not trade on, or disclose, the information until it has been generally disclosed.

D. Market Rumours. As a matter of principle, no comment will be issued by the Corporation to respond to market rumours, unless a clarification is reasonably required in light of the circumstances. If a rumour relates to material information relating to the Corporation that has in fact occurred, the Corporation has a regulatory obligation to make timely disclosure of such information.

E. Content of Meetings. When participating in shareholder meetings, news conferences, analysts' conferences and private meetings with analysts, Authorized Spokespersons must only disclose information that either is not material information or is material information but has previously been generally disclosed. Any selective disclosure of undisclosed material information is not permitted. After each shareholder meeting, news conference, analysts'

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conference or private meeting with analysts, the Corporation’s participants should normally meet and review the disclosures made during the course of the meeting or conference to determine if any undisclosed material information was unintentionally disclosed. If undisclosed material information was disclosed, the participants must advise a member of the Governance Committee, who shall take immediate steps to ensure that the information is generally disclosed.

ELECTRONIC DISCLOSURES

A. Disclosure of Information via Electronic Communications. The Governance Committee shall ensure that all electronic communications are made in accordance with this Policy. Distribution of information via a website, e-mail or otherwise via the Internet is subject to the same laws as traditional forms of dissemination such as news releases. Disclosure of any information by the Corporation through electronic communications is still subject to the rules and regulations noted in this Policy. The Governance Committee must ensure that all investor relations’ information made available by the Corporation on the website, broadcast via e-mail or otherwise on the Internet complies with applicable securities laws and this Policy.

B. Electronic Communications Cannot be Misleading. The Governance Committee must ensure that material information posted on the Corporation’s website is not misleading. Material information is misleading if it is incomplete, incorrect or omits a fact so as to make another statement misleading.

C. Website. The Governance Committee is responsible for creating and maintaining the Corporation’s website, or arranging for a third party to provide this service. The Corporation’s website must be maintained in accordance with the following:

the following information must be included on the website:
all material information that has previously been generally disclosed, including, without limitation, all documents filed on SEDAR or a link to those documents on SEDAR;
all news releases;
the website must contain an e-mail link to an investor relations contact for the Corporation to facilitate communication with investors;
all investor information posted on the website must indicate the date on which it was prepared or last modified and include a notice that advises the reader that the information was accurate at the time of posting, but may be superseded by subsequent disclosures;
inaccurate information must be promptly removed from the website and a correction must be posted;
information contained on the website must be removed or updated when it is no longer current, but provided that information is retained for at least two years from the date of posting;

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a list of all (but not less than all) analysts known to follow the Corporation may be posted on the investor relations page, but analysts’ reports must not be posted on the Corporation’s website;
all links from the Corporation’s website must be approved by the Governance Committee and all links must include a notice that advises the reader that he or she is leaving the Corporation’s website and that the Corporation is not responsible for the contents of the other site; and
no links will be created from the Corporation’s website to chat rooms, newsgroups, blog or bulletin boards.

D. Electronic Communications Cannot be Used to Tip or Leak Material Information. Employees must not use the Internet to tip or discuss in any form undisclosed material information about the Corporation. The Corporation must not post a material news release on its website or distribute it by e-mail or otherwise on the Internet before it has been disseminated on a newswire service in accordance with the applicable law and the policies of the CSE and this Policy.

E. Electronic Communications in Connection with a Securities Distribution must Comply with Securities Law Restrictions. The release of information and promotional materials relating to a public offering before or during the offering is subject to restrictions under applicable securities laws. All promotional materials related to a distribution of securities should be reviewed by legal counsel to the Corporation before they are posted on a website to ensure that such materials are consistent with the disclosure made in the offering documents. Additionally, as anyone in the world can access a website, foreign securities regulators may take the view that posting offering documents on a website that can be accessed by someone in their jurisdiction constitutes an offering in that jurisdiction unless appropriate disclaimers are included in the document or other measures are taken to restrict access.

F. Posting of Information Electronically. All investor relations information, including all material public documents, should be posted on, or made accessible through, the Corporation’s website as soon as possible following dissemination that has been made in accordance with this Policy.

G. Chatroom Participation Prohibited. Employees are prohibited from participating in Internet chat rooms, or news groups in discussions relating to the Corporation or its securities.

PART III - PROCEDURES RELATED TO INSIDER TRADING

UNDISCLOSED MATERIAL INFORMATION

A. Confidential Treatment. Any person to whom this Policy applies and who has knowledge of undisclosed material information must treat the material information as confidential until the material information has been generally disclosed.

B. Limitation on Disclosure of undisclosed material information. Undisclosed material information shall not be disclosed to anyone, except in the necessary course of business. If undisclosed material information has been disclosed in the necessary course of business, anyone so informed must clearly understand that it is to be kept confidential, and, in

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appropriate circumstances, execute a confidentiality agreement. When in doubt, all persons to whom this Policy applies must consult with the Governance Committee to determine whether disclosure in a particular circumstance is in the necessary course of business. For greater certainty, disclosure to analysts, institutional investors, other market professionals and members of the press and other media will not be considered to be in the necessary course of business.

C. Prevention. In order to prevent the misuse of inadvertent disclosure of undisclosed material information, the procedures set forth below should be observed at all times:

documents and files containing confidential information should be kept in a safe place to which access is restricted to individuals who “need to know” that information in the necessary course of business, and code names should be used if necessary;
confidential matters should not be discussed in places where the discussion may be overheard;
transmission of documents containing undisclosed material information by electronic means must only be made where it is reasonable to believe that the transmission can be made and received under secure conditions; and
unnecessary copying of documents containing undisclosed material information must be avoided and extra copies of documents must be promptly removed from meeting rooms and work areas at the conclusion of the meeting and must be destroyed if no longer required.

BLACKOUTS

A. Regular blackout periods, during which no trading in the securities of the Corporation is permitted, apply to all Employees. Regular blackout periods will commence two weeks before the end of each of the Corporation’s fiscal quarters and will terminate at the end of the first full trading day after the day of the publication of the financial results for the quarter.

B. The Governance Committee may at any time, and from time to time, declare a trading blackout if in their determination there is undisclosed material information in existence and for which it would be inappropriate for persons covered by this Policy to trade any securities of the Corporation (a “General Blackout”). All Board Members, Officers, Employees and Contractors who are so advised by the Governance Committee shall be prohibited from trading securities of the Corporation during a General Blackout. A General Blackout will be imposed at the point in time when the Corporation and legal counsel determine a material financing or sale of securities is being contemplated until such time as it is subsequently determined that no material financing or sale of securities will proceed.

C. The Governance Committee, or a designated person, will inform Board Members, Officers, Employees and Contractors of a General Blackout by means of e-mail notification with read receipt requested. Persons to whom this Policy applies will provide a current e-mail address to the Governance Committee.

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TRADING OF SECURITIES OF THE CORPORATION

A. “Insider trading”, which refers to persons in a special relationship with the Corporation purchasing or selling or otherwise monetizing securities of the Corporation while in possession of undisclosed material information, is prohibited. This prohibition also applies for a reasonable period of time after previously undisclosed material information is disseminated to the public by way of a press release (until the end of the first full trading day after the day of the dissemination, unless otherwise advised) for the public to analyze the information.

B. Option Grants During Blackout. No share options will be granted during a General Blackout.

C. Exception. A Board Member, Officer, Employee or Contractor may not purchase or sell securities of the Corporation during a General Blackout. This trading prohibition does not apply to the acquisition of securities through the exercise of share options but does apply to the sale of the securities acquired through the exercise of the option.

D. Derivative Transactions. Insiders and other persons who are subject to the policy shall not enter into derivative-based transactions that involve, directly or indirectly, securities of the Issuer.

INSIDER REPORTS

A. Insiders of the Corporation who are “Reporting Insiders”, as defined in National Instrument 55-104 – Insider Reporting Requirements and Exemptions of the Canadian Securities Administrators are required, subject to certain exceptions, to file an initial insider report within ten days of becoming a Reporting Insider and subsequent insider reports within five days following any trade of securities of the Corporation (which for purposes of this paragraph include derivatives the value of which is related to the value of securities of the Corporation). If a Reporting Insider who would otherwise have to file an insider report does not own or have control over or direction over securities of the Corporation, or if ownership or direction or control over securities of the Corporation remains unchanged from the last report filed, a report is not required.

B. Insiders who are unsure of whether they are Reporting Insiders or who have made a trade and require assistance with the preparation or filing of an insider report may contact Governance Committee who will arrange for assistance.

Non-compliance with this Policy is a serious breach of the terms and conditions of engagement and will be dealt with accordingly.

SCHEDULE “A”

INDIVIDUALS AND ENTITIES TO WHOM THIS POLICY APPLIES

“Board Members, Officers, Employees and Contractors” means a Director, an Officer, an Employee or an independent Contractor (who is engaged in an employee-like capacity) of the Corporation. As described below, all Board Members, Officers, Employees and Contractors are also Persons in a Special Relationship with the Corporation.

“Employee” means a full-time, part-time, contract or secondment employee of the Corporation or any of its subsidiaries.

“Insider” means: A Director or an Officer of the Corporation; A person who beneficially owns, directly or indirectly, more than 10% of the voting securities of the Corporation or who exercises control or direction over more than 10% of the votes attached to the voting securities of the Corporation (a “10% Shareholder”); A Director or an Officer of a subsidiary of the Corporation; or A Director or an Officer of a 10% Shareholder of the Corporation.

“Persons in a Special Relationship with the Corporation” means:

each Director, Officer, Employee and Contractor;
each 10% Shareholder;
each Director, Officer, Employee or Contractor of a 10% Shareholder; Each Director, Officer, Partner and Employee of a Corporation that is engaging in any business or professional activity with the Corporation or its subsidiaries and who comes into contact with material information;
each person or Corporation that learned of material information with respect to the Corporation from a person or Corporation described above and knew or ought reasonably to have known that the other person or Corporation was in such a special relationship; and
any spouse, live-in partner or relative of any of the individuals referred to above who resides in the same household as that individual.

A Corporation is considered to be a “Subsidiary” of another Corporation if it is controlled by (1) that other, (2) that other and one or more companies, each of which is controlled by that other, or (3) two or more companies, each of which is controlled by that other; or it is a subsidiary of a Corporation that is that other’s subsidiary. In general, a Corporation will control another Corporation when the first Corporation owns more than 50% of the outstanding voting securities of that other Corporation.

“Officer” means:

a Chair or Vice-Chair of the Board of Directors, a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer, a President, a Vice-president, a Secretary, an Assistant Secretary, a Treasurer, a General Counsel, an Assistant Treasurer and a General Manager;
every individual who is designated as an officer under a by-law or similar authority, and

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every individual who performs functions similar to those normally performed by an individual referred to above.

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SCHEDULE “B”

EXAMPLES OF INFORMATION THAT MAY BE MATERIAL

Changes in Corporate Structure
- changes in share ownership that may affect control of the Corporation;
- major reorganizations, amalgamations or mergers;
- take-over bids, issuer bids or insider bids.

Changes in Capital Structure
- the public or private sale of additional securities;
- planned repurchases or redemptions of securities;
- planned splits of common shares or offerings of warrants or rights to buy shares;
- share consolidation, share exchange or stock dividend;
- changes in the Corporation’s dividend payments or policies;
- the possible initiation of a proxy fight;
- material modifications to the rights of security holders.

Changes in Financial Results
- 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 Corporation’s assets;
- a material change in the Corporation’s accounting policies.

Changes in Business and Operations
- a significant change in capital investment plans or corporate objectives;
- significant new contracts;
- changes to the Board of Directors or executive management;
- the commencement of, or developments in, material legal proceedings or regulatory matters;

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waivers of corporate ethics and conduct rules for Officers, Directors, and other key employees;
changes in expectations of mineral project development or the parameters of the development;
significant acquisitions or dispositions of assets, property or joint venture interests;
acquisitions of other companies, including a take-over bid for, or merger with, another Corporation;
a significant accident or incident involving personnel, contractor personnel, major equipment, the environment, or third parties in and around the operation who are affected by the Corporation’s activities;
a significant notice, demand, or administrative proceeding imposed by regulatory authorities in relation to the Corporation’s activities.

Changes in Credit Arrangements

the borrowing or lending of a significant amount of money;
a mortgaging or encumbering of the Corporation’s assets.

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SCHEDULE F
CODE OF BUSINESS CONDUCT AND ETHICS

PURPOSES OF THIS CODE

The Company is committed to a culture of honesty, integrity and accountability and strives to operate its business in accordance with the highest ethical standards and applicable laws, rules and regulations. This Code of Business Conduct and Ethics (this “Code”) outlines the principles that should guide all directors, officers and employees of the Company in the performance of their duties. For the purpose of this Code, any reference to “employees” or “employee” includes any director, officer, employee of, and person under contract with, the Company and its subsidiaries (if any).

Employees of the Company must not only comply with applicable laws, rules and regulations but also must engage in and promote honest and ethical conduct and abide by the policies and procedures that govern the conduct of the business of the Company. The responsibilities of each employee include helping to create and maintain a culture of high ethical standards and commitment to compliance and, in the case of directors and officers, maintaining a work environment that encourages employees to raise concerns with management and promptly addressing employee compliance concerns.

This Code is not meant to be a complete list of all legal and ethical obligations of the employees of the Company. The Company provides this Code to its employees to offer guidance in properly recognizing and resolving the legal and ethical issues that they may encounter while conducting the business of the Company. Should an employee be confronted with a situation where further guidance is required, the matter should be discussed with a member of management or the Audit Committee of the Company (the “Committee”).

This Code is a statement of certain fundamental principles, policies and procedures that govern the employees of the Company in the conduct of the business of the Company. It is not intended to, and does not create, any rights relating to any employee, customer, supplier, competitor, shareholder or any other person or entity. This Code is not to be interpreted to modify or derogate from the duty or obligation of any employee as set out in any employment agreement or under applicable law.

ADMINISTRATION OF THIS CODE

The board directors of the Company (the “Board”) have adopted this Code. The Board reviews this Code on an annual basis and has delegated compliance oversight and maintenance of the Code to the Committee. The Committee is responsible for monitoring compliance with this Code, for regularly assessing its adequacy, for interpreting this Code in any particular situation, for reviewing compliance with the Code, and for approving any changes to this Code from time to time.

The Committee, in consultation with the Board, reviews the Code and the process for administering the provisions of the Code on a yearly basis. The Committee updates the Board on a quarterly basis regarding compliance with the Code and reports any alleged violations to the Board, as necessary. The Committee may designate a compliance officer (“Compliance Officer”) to maintain compliance by employees with the Code on a day to day basis.

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In order to seek a waiver of this Code, full disclosure of the particular circumstance must be made to the Committee. Amendments to and waivers of this Code will be publicly disclosed as required by applicable laws, rules and regulations.

3. CONFLICTS OF INTEREST

Employees have a duty of loyalty to the Company and are therefore expected to always act in the best interests of the Company. A conflict arises when the personal interests or activities of an employee influence or have the potential to influence the exercise of his or her judgment in the performance of his or her duties. Conflicts of interest and even the appearance of a conflict of interest may compromise the reputation of the Company and must be avoided.

The Company respects its employees’ right to privacy in their personal activities and financial affairs. It is the responsibility of each employee to ensure that his or her personal conduct complies with the following principles, which are not intended to address every potential conflict situation.

A. Employment or Affiliation with a Competitor, Supplier or Customer: Full-time employees may not act as directors, officers, employees, consultants or agents of entities that compete directly with the business of the Company or do business with the Company (such as customers, suppliers or business partners of the Company) without the prior written approval of the Committee. In addition, employees may not own, directly or indirectly, a beneficial interest in any of these entities unless an employee is making an investment in securities that are listed on a national or international securities exchange and the total value of the investment is less than three per cent of the aggregate value of the class of securities involved and the amount of the investment is not so significant that it could affect the employee’s business judgement on behalf of the Company.

B. Independent Business Ventures: Employees may not engage in independent business ventures or agree to perform services for other businesses without the prior written approval of the Committee and, where such approval is obtained, may only engage in such business or agree to perform such services if the activity does not interfere with the employee’s devotion of time and effort to the conduct of the business of the Company or otherwise affect his or her ability to work effectively.

C. Personal Benefits, Gifts, Bribes and Kickbacks: Employees may not use their position as an employee of the Company to derive or secure any personal, financial or other benefit for themselves or their relatives. An employee may not solicit and/or accept any gift or favour from any competitor, supplier or customer except to the extent customary and reasonable in amount and not in consideration for any improper action by the recipient. The offering or accepting of bribes, payoffs or kickbacks made directly or indirectly to obtain an advantage in a commercial transaction are strictly prohibited.

D. Reporting Conflict: Each employee is required to promptly disclose any actual or potential conflict of interest to the Company. Any transaction, relationship or interest that reasonably could be expected to give rise to a conflict of interest should be reported. Actual or potential conflicts of interest involving a director or executive officer should be disclosed directly to the chair of the Board.

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Although the principles above refer only to employees of the Company, employees should also exercise care to avoid actual or potential conflicts of interest that may arise because of the activities of their immediate family members and other members of their household.

4. PROTECTION AND PROPER USE OF CORPORATE ASSETS

All employees of the Company are expected to protect the assets of the Company and ensure they are used for legitimate business purposes only. Theft, carelessness and waste have a direct impact on the business and profitability of the Company. Any suspected incidents of fraud or theft should be immediately reported for investigation.

The assets of the Company include information, equipment, office supplies, hardware, software, intellectual property and time. Such assets may not be used for personal benefit, nor may they be sold, borrowed or given away without proper authorization. Occasional personal use of certain corporate resources (e.g. computer, fax or e-mail) is acceptable where the interests of the Company are not adversely affected. However, employees are expected to consult a member of management for approval if in doubt.

5. INVENTIONS

The Company is legally entitled to all rights in ideas, inventions and works of authorship relating to its business that are made by any employee during the scope of his or her employment with the Company or while using the Company's resources.

6. USE OF E-MAIL AND INTERNET SERVICES

E-mail systems and Internet services are provided to help employees perform their duties and responsibilities related to the Company. Incidental and occasional personal use is permitted, but use for personal gain or any improper purpose is not permitted. Employees may not access, send or download any information that could be insulting or offensive to another person, such as sexually explicit messages, cartoons, jokes, unwelcome propositions, ethnic or racial slurs or any other message that could be viewed as harassment. "Flooding" the systems of the Company with junk mail and trivia hampers the ability of the systems to handle legitimate corporate business and is prohibited.

Employees' messages (including voice mail) and computer information are considered corporate property. Subject to the Company obtaining the necessary consents as required by applicable law, the Company reserves the right to access and disclose this information as necessary for business purposes. Employees should use good judgment, and should not access, send messages or store any information that he or she would not want to be seen or heard by other individuals.

7. DISCLOSURE

It is the policy of the Company to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws, rules and regulations in all reports and documents that the Company files with, or submits to, securities regulators and in all other public communications made by the Company, as further set out in the Company's Disclosure and Insider Trading Policy. The management of the Company has the general responsibility for preparing such filings and such other

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communications and should ensure that such filings and communications comply with all applicable laws, rules and regulations. Employees must provide all necessary information to management when requested and must inform management if they become aware that any information in any such filing or communication was untrue or misleading at the time such filing or communication was made or if they have information that would affect any filings or communications to be made in the future.

The Company maintains accounting and internal control systems designed to provide reasonable assurance that the assets of the Company are safeguarded against loss and the financial records of the Company are reliable for preparing financial statements. No fraudulent or false entries should be made for any reason in the books, records, or accounts of the Company.

8. CORPORATE OPPORTUNITIES

Employees owe a duty to the Company to advance its legitimate interests when an opportunity to do so arises. In this regard, employees may not appropriate for their own use, or that of another person or organization, the benefit of any business venture or opportunity which they learned about during the course of their employment, unless it is first offered to the Company and the Company decides not to pursue it.

9. CONFIDENTIALITY OF CORPORATE INFORMATION

During the normal course of business, employees may have access to, among other things, non-public information regarding the customers of the Company, suppliers, operations, strategic plans, financial affairs, employees and trade secrets. This information is a key corporate asset and every employee has an obligation to protect it and keep it in the strictest confidence, except when disclosure is explicitly authorized pursuant to the Disclosure and Insider Trading Policy of the Company or when disclosure is legally required. The unauthorized use or disclosure of confidential information of the Company could destroy its value and give an unfair advantage to others. Care should be taken in disposing of documents containing confidential information, such as shredding documents, before discarding. Confidential information also includes any information relating to the business and affairs of the Company that results in or would reasonably be expected to result in a significant change in the market price or value of any securities of the Company or any information a reasonable investor would consider important in making an investment decision. Employees must not use confidential information for their own advantage or profit.

An employee’s obligation to protect the confidential information of the Company exists whether or not the information is explicitly labelled as being confidential and the obligation continues even after leaving the employ of the Company.

Employees must adhere to the guidelines and policies set out in the Company’s Disclosure and Insider Trading Policy, a copy of which can be obtained from the Committee.

10. FAIR DEALING

The Company competes vigorously in its business dealings but is committed to practices that are fair and honest. In this regard, employees are expected to respect the rights of, and deal fairly with, the employees, customers, suppliers, investors, shareholders, business partners, regulators and competitors

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of the Company. No employee may take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair dealing practice.

11. GIFTS AND ENTERTAINMENT

The purpose of business entertainment and gifts in a commercial setting is to create goodwill and sound working relationships, not to gain unfair advantage with customers, suppliers, investors, shareholders, business partners, regulators and competitors of the Company.

Offering or receiving any gift, gratuity or entertainment should be avoided where such gesture might influence the judgment of the recipients or a third party in their business dealings with or on behalf of the Company or other party. These guidelines apply at all times, and do not change during traditional gift-giving seasons.

The value of gifts should be nominal, both with respect to frequency and amount. Gifts that are repetitive, regardless of the size, may be perceived as an attempt to create an obligation to the giver and are therefore inappropriate. Likewise, business entertainment should be moderately scaled and intended only to facilitate business goals.

12. POLITICAL CONTRIBUTIONS

Financial support to political organizations requires the express approval of the officers of the Company. Any employee engaging in personal political activities must do so in their own right and not on behalf of the Company. Corporate donations to charities made on behalf of the Company shall be within budgets approved by appropriate personnel.

13. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Company is subject to a number of laws, rules and regulations with respect to the conduct of its business. Employees are expected to maintain compliance with the letter and spirit of all laws governing the jurisdictions in which they perform their duties. This Code does not purport to address all areas of law that employees might encounter in the day-to-day business of the Company. The following areas, however, should be specifically noted:

A. Human Rights Laws: The Company values the diversity of its employees, customers and suppliers and is committed to providing equal treatment in all aspects of the business. Abusive, harassing or offensive conduct is unacceptable, whether verbal, physical, visual or otherwise. The Company will not tolerate any conduct that is discriminatory or harassing or otherwise compromises an individual's human rights.

B. Privacy Laws: The Company is committed to maintaining the accuracy, confidentiality, security and privacy of the personal information of its customers, suppliers and employees. Employees who have access to personal information are expected to support the efforts of the Company to develop, implement and maintain procedures and policies designed to manage personal information.

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C. Health and Safety Laws: The Company strives to comply with all applicable health and safety laws and regulations as part of its commitment to providing employees with a safe and healthy work environment. Employees have a responsibility to maintain this work environment. In this regard, employees are expected to work in a safe manner with due regard for their personal safety as well as that of their co-workers and to report accidents, injuries, hazardous equipment and unsafe practices. Employees are prohibited from engaging in the business of the Company while under the influence of alcohol or illegal drugs.

D. Environmental Laws: Cognizant of its responsibility to the environment, the Company strives to comply with all applicable environmental laws and regulations. Employees are expected to support the efforts of the Company to develop, implement and maintain procedures and programs designed to protect and preserve the environment.

E. Securities Laws: The Company is committed to protecting security holder investments and expects all employees to comply with the applicable reporting obligations and trading restrictions imposed by the Company, any securities commission or stock exchange. Employees who are in possession of material information about the Company must not trade in securities of the Company until such information is generally publicly available. Providing inside information to others who then trade on such information is also strictly prohibited. Employees should make themselves familiar with the trading policy and disclosure policy of the Company. Employees must adhere to the guidelines and policies set out in the Company's Disclosure and Insider Trading Policy, a copy of which can be obtained from the Committee.

F. Competition Laws: Competition laws are enacted to limit practices that are seen to impair the function of a free and open marketplace. A complete description of these laws is beyond the scope of this Code, however, they include price fixing, bid rigging, price discrimination, allocation of markets and boycotting of certain suppliers or customers. Employees having regular dealings with customers and suppliers should become familiar with the laws applying to these practices as non-compliance can result in severe penalties being imposed on both the Company and the individuals involved.

14. PAYMENTS TO DOMESTIC AND FOREIGN OFFICIALS

Employees must comply with all laws prohibiting improper payments to domestic and foreign officials.

Applicable legislation may prohibit an offer, payment, promise of payment or authorization of the payment of any money or gift to a foreign official, foreign political party, official of a foreign political party or candidate for political officer to influence any act or decision of such person or party to obtain or retain business. Applicable legislation may also prohibit a payment to any person with the intention that all or a portion of that payment will be offered or given, directly or indirectly, to any such political person for any such purpose. Although payments may not be illegal, the Company's policy is to avoid such payments.

Violation of applicable legislation may be a criminal offense, subjecting the Company to substantial fines and penalties and any employee acting on behalf of the Company to imprisonment and fines.

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15. STANDARDS OF COMPLIANCE

A. Initial Compliance

Employees, current and future, must:

(i) become thoroughly familiar with this Code;
(ii) resolve any doubts or questions about the Code with the Committee;
(iii) inform the Committee of any existing holdings or activities that might be, or appear to be, at variance with this Code;
(iv) prepare written disclosures of such information, if requested, by the Committee; and
(v) take steps to correct existing situations and bring holdings and activities into full compliance with this Code; such steps will be approved in writing by the Committee and will be based on the written disclosure submitted by employees, officers or directors.

All employees will be required to personally certify that they have read the Code and agree to fully comply with its terms by signing the Form of Receipt and Acknowledgment attached to, and forming part of, this Code. Employees will be required to make such a personal certification on an annual basis.

B. Maintaining Compliance

(i) Employees have the responsibility to maintain their understanding of this Code.
(ii) The Committee is responsible for maintaining awareness on the part of the employees of the importance of their adhering to this Code and for reporting deviations to the Board.
(iii) As requested by the Board or the Committee, employees will be asked to verify their understanding of this Code and their compliance from time to time.
(iv) Employees must inform the Committee, and any Compliance Officer, as applicable, of any changes in their holdings or activities that might be, or appear to be, in non-compliance with this Code. The Compliance Officer and the Committee will consult with the Board, as necessary.
(v) Employees must prepare written disclosure of such changes, if requested the Committee, and any Compliance Officer, as applicable.
(vi) Employees must take steps to correct any such changes, if necessary, to bring holdings and activities into full compliance. Such steps will be approved in writing and will be based on the written disclosures submitted by employees.

16. VIOLATIONS OF STANDARDS

Employees who know of, or suspect, a violation of this Code or of any applicable law, rule or regulation have an obligation to immediately report this information to a member of the Committee. The

Committee will follow the procedure set out in the Company’s Whistle blower Policy to investigate the violation.

In addition to any disciplinary action taken by the Company, violations of some provisions of this Code may require restitution and may lead to civil or criminal action against individual employees and any Company involved.

Retaliation in any form against an individual who reports a violation of this Code or of law in good faith, or who assists in the investigation of a reported violation, is itself a serious violation of this Code. Acts of retaliation should be reported immediately to the Committee and will be disciplined appropriately.

Approved by the Directors on July 7, 2024.

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CERTIFICATE OF THE CORPORATION

Dated April 22, 2025

This Prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by the prospectus as required by the securities legislation of the Province of Ontario.

(signed) Ben Tsur Joseph
Chief Executive Officer

(signed) Alan Rootenberg
Chief Financial Officer

On Behalf of the Board of Directors

(signed) Haim Alkoby
Director

(signed) Lilach Lotan
Director

CERTIFICATE OF THE PROMOTER

Dated April 22, 2025

(signed) Ben Tsur Joseph
Chief Executive Officer

64213342.3

AI assistant

Shelfie Tech — Share Issue/Capital Change 2025

48529_rns_2025-04-22_ffcc96ef-c361-4c98-a941-735f9ff97bd3.pdf

PROSPECTUS

SHELFIE-TECH LTD

GLOSSARY

GENERAL MATTERS

FORWARD-LOOKING STATEMENTS

FINANCIAL STATEMENT PRESENTATION IN THIS PROSPECTUS

PROSPECTUS SUMMARY

Description of Business

Consultants, Directors and Officers

Qualification of Underlying Securities

Listing

Risk Factors

Financial Information

Use of Available Funds

CORPORATE STRUCTURE

Name, Address and Incorporation

Intercorporate Relationship

GENERAL DEVELOPMENT OF THE BUSINESS

History

Prior Financings

Intellectual Property

Artificial Intelligence

The App

Ethical Issues

NARRATIVE DESCRIPTION OF THE BUSINESS

Summary

Market Need

Product & Technology

Background

Overview

Detailed Description

Expected Benefits

In-Store Advertising

Return on Investment for Retailers

Intellectual Property:

On-Shelf Availability

MARKET OPPORTUNITY & COMPETITION

Total Addressable Market

Competitive Landscape

BUSINESS OBJECTIVES, STRATEGY AND MILESTONES

Business & Revenue Model

Marketing

Operating Structure

Market Penetration

Research and Development

USE OF AVAILABLE FUNDS

Available Funds and Principal Purposes

Note:

Business Objectives and Milestones

DIVIDEND POLICY

NOTEWORTHY FEATURES OF ISRAELI CORPORATE LAW

Corporate Governance Practices

Board of Directors; Powers of the Board

Chairperson of the Board

External Directors

Duties of Shareholders

Shareholders' Meetings

Information Rights

Dividends

Mergers and Acquisitions

Register of Shareholders

Fiduciary Duties of Office Holders

Exculpation, Insurance and Indemnification of Office Holders

Board Meetings

Directors' Compensation

Audit Committee

Compensation Committee

Compensation Policy

Internal Auditor

Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions

Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions

SELECTED FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

DESCRIPTION OF SHARE CAPITAL

Common Shares

Warrants

Subscription Receipts

Shelfie Tech Share Issue/Capital Change 2025