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, 2007. The company, incorporated in Israel, was a leading supplier of wide-format and super-wide format digital printing systems. A pivotal event occurred shortly after the reporting period: on February 29, 2008, the company sold substantially all of its business assets and liabilities to Hewlett-Packard Company (HP) for a total consideration of approximately $121.5 million. Following this transaction, the company ceased operations, changed its name to Ellomay Capital Ltd., and transitioned into a shell company holding cash proceeds to seek new business opportunities.

Key Financial Metrics (Year Ended Dec 31, 2007)

Note: The financial statements reflect operations prior to the HP sale. The sale proceeds and related debt repayments occurred in early 2008.

Material Changes vs. Prior Period

• Revenue Growth: Total revenues increased 9.7% from $78.0 million in 2006 to $85.6 million in 2007. This was driven by a 10.5% increase in product sales (primarily UV-based ink and printers) and flat service revenue.
• Profitability Deterioration: Despite revenue growth, the net loss widened significantly from $(1.9) million in 2006 to $(6.4) million in 2007. This was primarily due to increased operating expenses (R&D, Selling & Marketing, and G&A) and higher financial expenses driven by currency fluctuations.
• Cost of Revenues: Cost of revenues increased to $56.5 million (66.0% of revenue) from $51.2 million (65.7% of revenue). Inventory write-offs increased to $1.2 million from $0.8 million.
• Debt Position: As of December 31, 2007, the company held approximately $22.0 million in bank debt (short and long-term). This debt was fully repaid in March and April 2008 using proceeds from the HP transaction.

Guidance, Outlook, and Risks

Current Status and Outlook: The company is now a shell company with no active operations. Its primary assets consist of cash and cash equivalents (approximately $78.7 million as of June 15, 2008, after debt repayment). Management's plan is to identify and evaluate suitable business opportunities, including acquisitions or business combinations.

Key Risks and Contingencies:

• Indemnification Liability: The company agreed to indemnify HP for breaches of representations and warranties. Liability is generally limited to amounts in an indemnity escrow account ($9.5 million for 18 months and $5 million for 24 months), though certain claims (e.g., fraud, environmental issues) are not limited.
• Regulatory Status: The company faces the risk of being classified as an "investment company" under the Investment Company Act of 1940 if it does not enter a business combination within 12 months of the HP sale. It also faces potential classification as a Passive Foreign Investment Company (PFIC) for U.S. tax purposes.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of December 31, 2007, citing material weaknesses in monitoring slow-moving inventory and the financial statement closing process.
• Liquidity of Shares: Shares are quoted on the OTC "Pink Sheets" (symbol: EMYCF.PK) following delisting from Nasdaq in 2005, resulting in limited market liquidity.

Important Facts for Investor Verification

• Post-Sale Cash Position: Verify the current cash balance held by the shell company and the status of the indemnity escrow accounts ($14.5 million total) following the HP transaction.
• Shareholder Concentration: As of June 2008, a group of investors (Kanir Joint Investments and S. Nechama Investments) beneficially owned approximately 71.5% of the ordinary shares, giving them significant control over future strategic decisions.
• Outstanding Warrants: There were approximately 43.4 million warrants outstanding as of June 2008, exercisable at various prices, which could significantly dilute existing shareholders if exercised.
• Legal Proceedings: Review the status of ongoing litigation not assumed by HP, including disputes with the Office of the Chief Scientist (OCS) and various customer/supplier lawsuits, which remain the company's responsibility.
• Future Business Plan: Confirm if the company has identified a specific target for acquisition or business combination, as the success of the current strategy depends entirely on this outcome.