ELLO

Business Context and Reporting Period

This Form 20-F is the annual report for Ellomay Capital Ltd. (formerly NUR Macroprinters Ltd.) for the fiscal year ended December 31, 2008. The company is an Israeli corporation currently classified as a shell company with no active operations. In February 2008, Ellomay sold its entire wide-format digital printing business to Hewlett-Packard Company (HP) pursuant to an Asset Purchase Agreement. Following the transaction, the company ceased all manufacturing and sales activities. Its current plan of operation is to identify and evaluate suitable business opportunities, strategic alternatives, or business combinations using the cash proceeds from the HP sale.

Key Financial Metrics

The financial results for 2008 are dominated by the sale of the business. The company reported a net income of $86.98 million for the year, a stark contrast to the net loss of $6.42 million in 2007. This turnaround was driven by a gain on sale of business of $95.14 million.

Liquidity and Debt: As of December 31, 2008, the company held approximately $76 million in cash, cash equivalents, and short-term deposits. The company fully repaid all short-term and long-term bank debt (approximately $22 million total) in March and April 2008 using proceeds from the HP transaction. Consequently, the company has no outstanding debt to banks or other financial institutions as of year-end.

Material Changes vs. Prior Period

• Cessation of Operations: Revenues dropped 87% to $11.4 million in 2008 because the company only operated for two months (January and February) before selling the business to HP. The 2007 figures reflect a full year of printing operations.
• Asset Composition: Total assets increased by 50% to $78.3 million. Prior to 2008, assets included inventory, property, plant, and equipment. As of 2008, assets consist almost entirely of cash and short-term deposits.
• Debt Elimination: Total liabilities decreased by 90% to $7.3 million. The company eliminated all bank loans and credit facilities, leaving only minor accrued liabilities and uncertain tax positions.
• Equity Turnaround: Shareholders' equity swung from a deficiency of $(22.2) million in 2007 to a positive $70.9 million in 2008 due to the recognition of the gain on the business sale.

Outlook, Risks, and Contingencies

Guidance and Outlook: The company has no specific financial guidance as it is a shell company seeking a new business combination. Management is actively exploring strategic transactions but has not targeted a specific industry. The company intends to implement a reverse share split to meet NASDAQ listing requirements in conjunction with a future business combination.

Key Risks and Contingencies:

• Investment Company Status: There is a risk that the company may be deemed an "investment company" under the Investment Company Act of 1940 if it does not acquire an operating business or limit its investments, which could restrict its ability to offer securities in the U.S.
• PFIC Status: U.S. shareholders may face adverse tax consequences if the company is classified as a Passive Foreign Investment Company (PFIC). While the company believes it qualifies for a "change of business" exception for 2008, this status is not guaranteed for future years.
• Indemnification Obligations: The company agreed to indemnify HP for certain breaches of representations and warranties. $14.5 million of the purchase price is held in escrow to secure these obligations ($9.5 million released after 18 months, $5 million after 24 months). Certain claims (e.g., fraud, environmental issues) are not limited to the escrow amount.
• Liquidity of Shares: The company's ordinary shares are quoted on the OTC "Pink Sheets" (symbol: EMYCF.PK) following delisting from NASDAQ in 2005. Trading volume is limited, and the shares may be subject to "penny stock" regulations.
• Legal Proceedings: The company retains responsibility for certain litigation not assumed by HP, including disputes with former distributors and employees. Management believes these will not have a material adverse effect.

Important Facts for Investor Verification

• Shell Company Status: Verify that the company has no current operating business and is solely holding cash from the HP sale while seeking a new acquisition.
• Escrow Release Schedule: Confirm the release dates for the $14.5 million held in escrow (August 2009 and February 2010) and any potential claims that could reduce this amount.
• Share Ownership Concentration: A small group of shareholders (Kanir Joint Investments and S. Nechama Investments) controls approximately 72.3% of the outstanding ordinary shares, giving them significant influence over corporate decisions.
• Reverse Share Split: Verify the status of the approved reverse share split (10-for-1) intended to facilitate a future NASDAQ listing.
• PFIC Determination: U.S. investors should consult tax advisors regarding the company's potential PFIC status for 2009 and the implications for tax reporting.