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					                                                                                                      Equity Research



                                                                                                             August 23, 2011


Rating: SPECULATIVE BUY                               Northcore Technologies Inc.
Target Price: $1.00                                   (NTI – TSX)
 All figures in C$, unless otherwise noted            Enterprise Social Commerce
                                                         Social Commerce: Northcore Technologies Inc. (“NTI”) provides
Recent Price:                               $0.21         social commerce technology into the enterprise space, thus
52 Week Range:                      $0.07 – $0.48         helping corporations better manage their assets and liquidate
Shares O/S         Basic (MM):              188.8         their inventories more effectively at the best possible prices.
                   F.D. (MM):               188.8
Market Cap         Basic (MM):            $39.65         Joint Venture with GE: Currently through a joint venture (“JV”)
Enterprise Value (MM):                    $39.20          with General Electric Company (“GE”), NTI provides a software
Fiscal Year End:                          Dec. 31         platform that allows companies to dispose of their excess assets
Cash (MM) (June 30/11):                      $1.1         quickly. NTI clients utilizing this unique environment include
Financials             2011E     2012E       2013E        KRAFT Foods Inc. (“KRAFT”), NACCO Material Handling Inc.
Revenue (MM)             $0.8      $2.6       $7.5        (“NACCO”) and Toro Corporation (“Toro”).
EPS                   ($0.02)    $0.00       $0.02
Net Income (MM)        ($2.8)    ($0.4)       $3.2       Dutch Auction Patents: NTI has unique patents and technology for
P/E (x)                  N/A       N/A        10.5        the Dutch auction model in the social commerce space. While a
EBITDA (MM)            ($1.9)      $0.1       $3.9        number of group selling companies like Groupon encourage group
Company Description: Northcore Technologies               buying behaviour, NTI has technology that incorporates Dutch
Inc. provides online commercial platforms for
                                                          auctions, which allow clients to concurrently perform price
large enterprises, including social commerce
environments. It helps companies to manage,               discovery and disposition in a group environment. This technology
redeploy or liquidate their assets through its SaaS       helps the enterprise sell the most amount of goods at the best
platform. It also can license its unique Dutch            possible price. NTI is in the process of building this technology into
auction technology for inclusion in group buying          enterprise platforms and licensing it to various group buying sites.
platforms to accelerate the sales process. The
company is based in Toronto, Ontario.                    Expect Significant Revenue Growth: We believe NTI can grow its
                                                          revenue to $2.6 million in F2012 and $75 million in F2016.
                                                         Recommendation: We are initiating coverage of NTI with a
                                                          SPECULATIVE BUY rating and a risk-adjusted $1.00 target price
                                                          based on our F2016 earnings estimates.




Al P. Nagaraj, M.S., MBA
Special Situations Analyst
                                                          Source: bigcharts.com
647.426.0291
anagaraj@byroncapitalmarkets.com                                             Please see end of this report for important disclosures
                                                                                             Northcore Technologies Inc.


                              Investment Highlights
                                Extending social commerce to enterprise: NTI provides enterprises and marketers
                                 with an online platform that leverages the functionality of social media to increase
                                 customer traffic and sales. Custom campaigns targeted towards its core customers
                                 through permission marketing additionally increases unit volume and sales.
                                GE as a JV Partner: Currently NTI independently, as well as through its JV
NTI can grow
                                 partnership with GE, helps large organizations to effectively track and utilize their
                                 assets. NTI has shown itself to be a trusted platform for large enterprises in the
tremendously by
                                 past few years. NTI is also in the process of developing and extending its social
extending social
                                 commerce platform for enterprises in the next few months. This should enable NTI
commerce platform to
                                 to effectively price and market its offerings in a number of new settings including
enterprises worldwide
                                 group buying environments.
                                Dutch auction in social commerce enhances group buying: NTI owns the
                                 intellectual property (“IP”) for Dutch auctions online and it can effectively leverage
                                 it in many industry segments. Today group buying sites do not provide significant
                                 flexibility in pricing methodologies and therefore the various offerings are not well
                                 differentiated. NTI can create the next generation of dynamic group buying
                                 environments. These can be delivered through a combination of development,
                                 licensing and hosting models. Such implementations help enterprises with viral
                                 marketing and real-time price discovery of their product offerings. A dynamic social
                                 commerce platform allows enterprises to achieve turnover of their assets and
                                 inventory quickly and efficiently. In addition to a quick turnaround in sales, the
                                 platform engages customers and establishes an accurate view of their products and
                                 pricing in the market place.
                                Significant revenue growth: We believe NTI has tremendous opportunity in North
                                 America, Europe and Asia. Companies including KRAFT, NACCO and Toro use NTI’s
                                 platform to leverage their enterprise assets, and we expect more large
                                 corporations to become customers in the next few quarters. The company has a
                                 proven offering in the market place, which we believe will drive revenue with
                                 significant margins. We expect NTI’s revenue to grow from $2.6 million in F2012 to
                                 $75 million in F2016.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                              P a g e |2
                                                                                              Northcore Technologies Inc.


                              Company Profile
                               Overview
                               Since 2001, NTI has been a trusted partner for some of the leading organizations in the
                               world that require advanced solutions for the effective management of their
                               inventories and assets across business units.
                               Exhibit 1 – NTI’s Sample Customer List
                               Bobcat Company                                  NACCO Material Handling Inc.
                               Discount This Holdings Inc.                     National Health Service
                               General Electric Company                        Paramount Resources Ltd.
                               Home Hardware Stores Limited                    Toro Corporation
                               Hyster Company                                  Xstrata plc
                               KRAFT Foods Inc.                                Yale Europe Materials Handling
                               Source: Company Reports

                               NTI is supported by a team of experienced and highly skilled professionals who work
                               closely with the clients to understand and resolve their concerns in the most effective
                               manner. Currently, the company owns 50 percent of GE Asset Manager LLC, a JV with
                               GE. Exhibit 1 shows a sample list of NTI’s customers.

                               Dutch Auction
                               A Dutch auction is an auction model where the initial price is set and is continually
                               dropped until a bidder accepts the price. When multiple items are offered the process
                               continues until all items are sold. Individual buyers may be cleared at differing prices.
                               The auction process is transparent, as it shows the clearing price to every participant in
                               the process; moreover, one of the significant advantages of this auction is speed. This
                               model is also conducive to time bound and/perishable items that need to be moved fast.
                               NTI owns a suite of patents and IP for the Dutch auction process online, which it
                               can effectively extend into many enterprise commerce applications. The IP can be
                               included in group buying environments through the purchase of the NTI platform or
                               simply licensed to other companies.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                P a g e |3
                                                                                             Northcore Technologies Inc.


                               Social Commerce
                               Enterprise Platform – Business to Consumer
                               With enterprises looking at new ways to get more customers and increase their
                               visibility in the market, newer avenues such as social commerce are gaining
                               momentum. With social commerce, companies are directly engaging more customers
                               through the use of interactive mediums such as mobile phones, desktops and tablets.
                               NTI specializes in offering solutions that allow brands to provide an enhanced user
                               experience. These solutions leverage social media to improve the overall user
                               experience and increase traffic effectively. Exhibit 2 shows an example of a group
                               discount deal available for participants interested in taking a drive in a Ferrari F430.
                               Exhibit 2 – Sample Group Discount Site




                               Source: Company Reports

                               By leveraging the patented Dutch auction process, social media can be optimized to
                               increase the brand value. This process introduces certain properties to the business
                               chain. These are:
                               •    Unique gaming experience;
                               •    Integrated social media tools;
                               •    Viral multipliers; and
                               •    Discount structure.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                              P a g e |4
                                                                                                Northcore Technologies Inc.

                               Exhibit 3 – Sample Dutch Auction Advertisement




                               Source: Company Reports

                               Innovative gaming features are introduced in a structure that is intuitive and very
                               simple to understand. This framework enables retailers to offer attractive incentives to
                               the customers when they attain the pre-decided sales goals. As a result, additional
                               customers are driven towards the service provider. Exhibit 3 shows a sample
                               implementation where the price is discounted down from an original value as time
                               goes by to induce buyers to purchase tickets to a Florida Panther’s hockey game
                               against the New York Rangers.
                               NTI’s social commerce solution also integrates social media tools to leverage viral
                               marketing. By employing viral marketing, companies can significantly increase their
                               web traffic. In order to make it easier for the companies to handle sales and produce
                               sales reports, NTI provides a powerful administrative interface. Using this interface,
                               retailers can manage their sales and generate reports in real time.
                               The NTI social commerce offering provides a multitude of benefits to clients who want
                               to deploy and host its social commerce solution. A holistic approach is taken to the
                               client engagement.
                               Some of the key features of NTI service include the following:
                               •     Strategic analysis of the business and opportunity for creating an integrated social
                                     commerce component;
                               •     Recommendations for differentiators and accelerators;
                               •     In-depth analysis and design of the desired technology environment;
                               •     Project management, integration and deployment of the solution; and
                               •     Robust hosting features to provide a comprehensive social commerce platform.
Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                 P a g e |5
                                                                                              Northcore Technologies Inc.

                               NTI can provide enterprises with its platform to enable social commerce including
                               group discounts or license its technology to enterprises interested in using NTI’s unique
                               patented methodologies.
                               Enterprise Products – Business to Business
                               Currently NTI has four platform-based products – Asset Seller, Asset Tracker, Asset Buyer
                               and Asset Appraiser – that mainly target business-to-business commercial transactions.
                               NTI offers its platform both directly and through its JV with GE.
                               Asset Seller - Enterprise
                               For improving their working capital, top management at companies understand that
                               maximizing negotiated prices for assets is the need of the hour. The challenge for them
                               lies in formulating an effective process that can help in connecting the buyers with
                               proper information about the product and service to expedite the purchasing process.
                               Selling methods such as progressive markdown, traditional high-bid auctions and fixed
                               price catalogue lead to an increase in asset disposition yields. However, many
                               corporations do not possess the necessary tools and expertise to take advantage of
                               these methods. Consequently, a large number of items are sent out for clearance
                               processes. To address this problem, many companies rely on NTI products.
                               Since 2001, NTI has helped organizations across a number of industries improve their
                               sales figures and operational efficiencies. The company provides a wide gamut of web-
                               based solutions to ensure:
                               •    Greater brand equity, as all transactions with the users are completed from the
                                    corporate web site;
                               •    Channel priority being made available to the buyers;
                               •    Higher returns for surplus products or assets at the end of the product lifecycle;
                               •    Smoother inventory management;
                               •    Greater returns on value of perishable products and services; and
                               •    Lower costs of sales.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                P a g e |6
                                                                                               Northcore Technologies Inc.

                               Exhibit 4 – Equipment Auction – GE JV




                               Source: Company Reports

                               The Asset Seller solution is fully equipped to cater to a wide range of transaction
                               methods such as descending price, ascending price, progressive markdown, fixed price
                               and hybrid pricing models. Owing to the wide range of transaction methods offered to
                               the customers, companies find it easier to opt for the best pricing strategy and ensure
                               higher returns. NTI also offers shopping cart, advanced reporting, catalogue and
                               financial statement features that constitute a single point for online sales and
                               transactions. As a result, companies get a holistic sales solution that increases turnover
                               and lowers the cost of sales. Exhibit 4 shows an advertisement for authorized Bobcat
                               dealers to participate in an online auction of steer loaders and track loaders.
                               Some of the top benefits offered by NTI’s asset seller capabilities include the following:
                               •     Improved brand equity combined with enhanced customer relationships;
                               •     Transparency in sales processes with accurate data analysis and reporting;
                               •     Enhanced implementation processes;
                               •     Lower costs of sales;
                               •     Cost savings on IT investments; and
                               •     Smoother integration with current information systems.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                 P a g e |7
                                                                                               Northcore Technologies Inc.

                               Asset Tracker - Enterprise
                               Large multinationals such as KRAFT and GE that have multiple offices in various
                               geographic locations benefit immensely by being able to track the assets they have
                               acquired over the years.
                               In many cases, the only way to address this problem is by changing the core business
                               practices to ensure better asset management. Organizations need to enhance their
                               asset utilization to bring down capital spending. In the recent years, enterprise
                               resource planning (“ERP”) asset management modules have come to provide tangible
                               solutions that can help manage financials more effectively. Some of the key drawbacks
                               and weaknesses that these solutions have identified include:
                               •     Inability to monitor capital equipment across domains and facilities;
                               •     Lack of reporting capabilities for handling details such as images, production
                                     equipment descriptions and manuals;
                               •     Lack of consistency in managing updates of the internal asset owners; and
                               •     Difficulty in evaluating asset utilization.
                               Exhibit 5 – Asset Tracker Application




                               Source: Company Reports




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                P a g e |8
                                                                                              Northcore Technologies Inc.

                               NTI’s asset and inventory management applications enable the asset-focused
                               organizations to keep a track on critical assets and equipment. This helps them to reduce
                               costs using effective methods. Some of the chief features of the offering include:
                               •    Scheduling and approval of the transfer of assets and equipment;
                               •    Asset and equipment management from different locations;
                               •    Monitoring the status of material transfers;
                               •    Simplification of cargo manifest processing and custom documentation;
                               •    Determination of ownership of mixed assets; and
                               •    Integration of material transfer data.
                               Exhibit 5 shows a screen shot of asset tracker that provides enterprises an online
                               platform to track their global assets. Key features enable the offering to provide
                               tangible benefits to the clients. Some of the top benefits offered include:
                               •    Streamlined processes of material transfer to reduce production downtime;
                               •    Simpler identification of surplus assets to ensure greater use;
                               •    Enhanced financial reporting for asset management; and
                               •    Easier integration with procurement, maintenance and financial activities.
                               Asset Buyer - Enterprise
                               Web-based sourcing and procurement is enabling a large number of organizations to
                               generate bottom line savings. According to industry experts, electronic procurement
                               can help reduce costs of generating purchase orders by up to 60 percent. By using NTI’s
                               sourcing and procurement solution, Asset Buyer, organizations are finding it easier to
                               streamline their purchasing processes significantly.
                               Asset Buyer is a comprehensive web-based solution that can be implemented to
                               automate processes of procurement and buying activities. This allows organizations to
                               focus on the important details of the sourcing initiative and achieve greater returns on
                               investment. This solution supports multiple e-tender formats such as request for
                               proposals, request for information and reverse auctions. Its template-driven workflow
                               and integrated library further bring down the time spent on generating new tenders.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                               P a g e |9
                                                                                              Northcore Technologies Inc.

                               Exhibit 6 – Asset Buying Application - Enterprise




                               Source: Company Reports

                               NTI also makes it convenient for the users to manage their supplier lists and choose
                               vendors to notify about the tenders. Following this, only the qualified suppliers can
                               create online responses. As a result, suppliers benefit greatly from lower tender
                               response costs and improved compliance with the tender requirements. After the end
                               of the tender period, Asset Buyer easily automates the assessment and scores of
                               suppliers’ responses. Accordingly, purchasing managers can evaluate the responses to
                               understand which supplier provides the greatest value. Exhibit 6 shows the screen shot
                               of the asset buyer platform offered by NTI.
                               Some of the top benefits provided by the Asset Buyer solution include:
                               •     Streamlined process of procurement by expediting the purchasing cycles by up to
                                     50 percent;
                               •     Better purchasing decisions by leveraging high-end reporting capabilities that
                                     enable the purchasing managers to assess the selection criteria;
                               •     Lower purchasing costs using in-depth sourcing and purchasing formats such as
                                     online procurement, reverse auction and RFP;
                               •     Strong specifications and attachments to ensure specific compliance;
                               •     Audit level transparency to governance level compliance and fair practices;
                               •     Lower IT expenditures using a hosted model that does not increase investments in
                                     the IT infrastructure; and
                               •     Simpler integration with the current information system by using XML standards
                                     and ERP application connectivity.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                              P a g e | 10
                                                                                                Northcore Technologies Inc.

                               Asset Appraiser - Enterprise
                               It is imperative for organizations to understand the actual value of assets to ensure
                               smoother process implementation, sales and M&A activities. In lieu of hiring expensive
                               professional appraisers, NTI offers an affordable, yet highly reliable solution called
                               Asset Appraiser that offers a commercial automated system for initiating hiring,
                               controlling, monitoring and completing appraisals for the organization. Exhibit 7 shows
                               a screen shot of the Asset Appraiser application from NTI that can be used to appraise
                               entire assets of multinational companies in various geographies.
                               Exhibit 7 – Asset Appraiser Input Screen Sample




                               Source: Company Reports

                               Some of the top benefits offered by the Asset Appraiser include the following:
                               •     One click process to start the hiring process for external resources;
                               •     Experience and expertise of professionals to ensure a smooth appraisal process;
                               •     Efficient management of remote locations;
                               •     Cost benefits by offering discounts on multiple items as well as travel;
                               •     Proper quality control at the time of the process;
                               •   Database analytics of acquired information supporting market trend analysis; and
                               •   Audit level transparency and compliance with Uniform Standards of Professional
                                   Appraisal (“USPAP”) standards.
                               NTI’s social commerce platform is the only enterprise-grade platform that provides
                               companies the proven ability to sell a variety of products and services. As shown in
                               Exhibit 8, NTI’s technology platform is used to even sell corporate jets in the market place.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                 P a g e | 11
                                                                                              Northcore Technologies Inc.

                               Exhibit 8 – Corporate Jet listing on NTI’s platform




                               Source: Company Reports


                               Services
                               NTI not only offers a social commerce platform but also provides the following services
                               to enterprises to enable faster deployment:
                               •     Software customization;
                               •     Application development;
                               •     System integration;
                               •     Business process consulting; and
                               •     Training.
                               Software Customization
                               In order to help enterprise clients easily transition into the social commerce space, NTI
                               customizes its platform to address the varied requirements of its clients. Using an open
                               architecture, the company provides demonstrable results in very little time.
                               Application Development
                               By working closely with its customers, the company has developed a technology that
                               addresses unique business requirements. The rapid application development
                               methodology simplifies processes and enables the company to offer customized
                               services to its clients at highly competitive pricing structures.
                               System Integration
                               NTI helps large organizations optimize their technology investments using state of the
                               art systems with tried and tested capabilities. Using these services, clients can
                               effectively upgrade their existing technology environments.
                               Business Process Consulting
                               Using NTI’s business process consulting services, clients find it easier to optimize the
                               management of their assets. This service helps clients streamline existing processes
                               and adopt enhanced sourcing and procurement practices. Furthermore, it can help
                               clients to streamline the deployment of new technologies.
                               Training
                               NTI delivers training to meet the varied requirements of its end users. Training can be
                               customized according to client requirements. Furthermore, through these training
                               sessions the company enables its clients to leverage the unique capabilities of its web-
                               based applications.
Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                              P a g e | 12
                                                                                               Northcore Technologies Inc.


                               NTI’s Expansion Strategy
                               NTI has a three-pronged strategy in building its Enterprise Social Commerce platform.
                               First, through its highly successful JV with GE, NTI plans to establish its technology
                               platform as the preferred choice for buying and selling assets for enterprises. Second,
                               NTI directly plans to deliver platforms for enterprises to create social commerce market
                               places for their products and services. It is significant that NTI is the only company that
                               targets social commerce platforms for enterprises. Its core technology suite, the Dutch
                               auction IP portfolio, and its proven ability to deal with large clients including KRAFT,
                               NACCO and GE significantly differentiate NTI from others in the space. Finally, NTI is
                               targeting various group buying industry leaders as potential clients that will either use
                               its technology platform and/or incorporate its IP in return for fees and royalties.
                               NTI has the capability, proven experience and valuable IP that will help it grow in the
                               market place.

                               Recent Developments
                               Financial Results: Three Months Ended June 30, 2011
                               For the three months ended June 30, 2011, revenue was up 51% to $187,000
                               from $124,000 during the same period last year. The increase in revenue was due to
                               higher social commerce services revenue in connection with development of a group
                               purchase platform.
                               The net loss increased to $0.01/share for the period compared to $0.00/share during
                               the same period last year. The increase in loss was attributed primarily to non-cash,
                               non-recurring stock-based compensation and professional fees. As of June 30, 2011,
                               NTI held cash of $1,124,000.

                               Recent Activities
                               In June 2011, NTI announced strategic changes to its Board of Directors and executive
                               management. Mr. Anthony DeCristofaro was named Chairman of the Board and Dr. Amit
                               Monga assumed the role of President and CEO of the company and has joined the Board
                               as Director. Both Mr. DeCristofaro and Dr. Monga have successfully built a number of
                               technology companies in the past and are realigning the company’s platform and IP to
                               focus on the enterprise social commerce space in an aggressive manner.
                               The company is moving into new high growth markets that are shaped by social
                               networking and driven by consumers who are shopping online for bargains. Social
                               discounting, as popularized by the likes of Groupon and many others, is a rapidly
                               growing industry and the company aims to leverage its Dutch auction patent portfolio
                               and e-commerce framework to deliver enhanced shareholder value.
                               In July, NTI launched a Social Commerce Group to deliver holistic technology
                               solutions that help businesses leverage social media to accelerate buying and selling.
                               The social commerce market segment is currently a multi-billion dollar industry that has
                               been validated by the successes of companies such as Groupon and LivingSocial. Using
                               NTI’s platform, savvy corporations can dramatically enhance customer acquisition and
                               repeat patronage.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                P a g e | 13
                                                                                                Northcore Technologies Inc.

                               In late July, NTI with its partner Discount This Holdings Inc. (“Discount This”)
                               announced the scheduled launch of the Discount This platform in September 2011.
                               Discount This is a unique entry in the group buying arena. It is the first product to
                               introduce viral discount accelerants and NTI's proprietary Dutch auction to the fast
                               growing area of social discounting. Members are incented to bring their circle of friends
                               and contacts "into the deal", and by doing so, additional benefits will accrue to all
                               participants. Discount This members are also able to participate in unique Dutch
                               auction events where prices will fall as the deal time expires.
                               Also in July, NTI received over $1.3 million dollars in proceeds from warrants exercised
                               by current holders.

                               Risks
                               Intellectual property: NTI’s inability to successfully obtain and defend its patents or other
                               proprietary or statutory protection for its technologies and products could also harm its
                               competitive advantage. It currently has the IP for Dutch auctions online and its ability to
                               compete in the market place may be severely harmed if the IP is not enforced.
                               Ability to maintain build and maintain relationships: NTI’s inability to maintain
                               relationships with companies like GE effectively would hamper its growth.
                               Access to funds: NTI may need to raise additional funds until the operations are self-
                               sustaining; the company’s inability to raise funds could negatively impact the firm.
                               Continued product development: NTI’s growth is dependent on its ability to enhance
                               current products and develop products that suit customers’ needs. Any failure in
                               developing and/or enhancing its products may negatively impact operations.
                               External factors: Factors such as major trade disputes, policy changes, sovereign
                               defaults, terrorism, currency shocks and other unforeseen events could disrupt the
                               company’s operations in the short term, just like any other company operating in
                               international markets.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                 P a g e | 14
                                                                                                  Northcore Technologies Inc.


                               Outlook and Valuation
                               The new management in place at NTI is aggressively focusing on Enterprise Social
 Growth will come
                               Commerce. While social commerce, including group discounting, has been proven highly
 through recurring
                               successful by the likes of Groupon and LivingSocial, most of the offerings have no real
 revenues from
                               differentiation and are mainly focused on marketing to consumers.
 existing customers on
 its platform and new          NTI, on the other hand, provides a platform that targets corporations as opposed to
 customers.                    consumers by providing them with an enterprise level social commerce platform
 Additional boosts to          enhanced with its Dutch auction IP.
 revenue may come              NTI’s JV with GE, along with having customers KRAFT and NACCO on board, has already
 from fees charged             proven the robustness of its product suite. NTI’s offering along with its Dutch auction
 per transaction               patents can effectively target a wide variety of large market places including, but not
                               limited to, the following markets:
                               •    Carbon credit disposition;
                               •    Game and event ticket sales;
                               •    Group purchasing and marketplace platforms;
                               •    Excess hotel room inventory auctions;
                               •    Intermodal freight capacity optimization; and
                               •    Advertising spot liquidation.
                               NTI can provide the complete end-to-end solution to these markets and serve as the social
                               commerce engine for enterprises as a Software as a Service (“SaaS”) model. It can also
                               license its core technology and IP to both established and new players in the market place.
                               By providing such a platform to large enterprises, NTI enables them to not only sell
                               more of their products but also helps companies to understand the purchase behaviour
                               and brand perception in real time.
                               Recently, NTI engaged Pellegrino & Associates, LLC ("Pellegrino"), a leading specialized
                               IP valuation company, to help examine the applicability of its core technology and
                               IP portfolio in selected business domains. A review by Pellegrino clearly shows
                               the tremendous opportunity NTI has in the next few years in the social commerce
                               market place.
                               As shown in Exhibit 9, we expect NTI’s revenue to grow exponentially in the next few
                               years as the company’s business model is based on recurring revenue.

                               Exhibit 9 – Summary of Estimates ($ MM, except per share data)
                                               Dec-31-2011E Dec-31-2012E Dec-31-2013E Dec-31-2014E Dec-31-2015E Dec-31-2016E
                               Revenue                 $0.75        $2.60       $7.50       $15.00       $35.00       $75.00
                               EBITDA                (1.944)        $0.14       $3.95       $11.05       $28.50       $56.25
                               Net income            (2.779)      (0.428)       $3.16        $9.66       $18.14       $39.14
                               EPS                   (0.017)      (0.002)       $0.01        $0.04        $0.08        $0.18
                               Source: Byron Capital Markets

                               As shown in Exhibit 9, we expect NTI to increase its revenue to $75 million by F2016.
                               We believe it is appropriate to value the company based on its F2016 numbers, as we
                               see a significant jump in revenue in the next few years.


Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                  P a g e | 15
                                                                                            Northcore Technologies Inc.

                               We expect the company to grow its revenue and earnings at a rate of 30% - 40% for a
                               number of years beyond F2016 based on enterprise social commerce platforms. We
                               have not included any royalty payments by any platform operators in our model. While
                               it is appropriate to put a 30x multiple on the F2016 earnings based on NTI’s expected
                               growth rate, we have opted to use a 15x multiple to be on the conservative side.
                               Applying a 15x multiple results in a valuation of $2.68/share; we further discount that
                               by a 25% discount rate to account for the fact that F2016 earnings are used. This
                               reduces our valuation to $1.02/share.

                               Conclusion
                               NTI has a unique platform that can drive social commerce, including group buying, for
                               the enterprise market. It has a JV with GE and has signed up major customers like
                               KRAFT and Toro to its platform, which proves the enterprise scale robustness of the
                               platform. The company can use its IP for online Dutch auctions as leverage and
                               enhance group buying platforms that target both consumers and enterprises. The
                               company has a solid pipeline of opportunities, and it is in the process of
                               building/licensing its unique technology to various enterprise partners. We believe NTI
                               can deliver multi-year high margin growth based on its unique platform and technology
                               in the market place.
                               We initiate coverage of NTI with a SPECULATIVE BUY rating and a $1.00 risk-adjusted
                               target price based on our F2016 earnings projections.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                            P a g e | 16
                                                                                                                Northcore Technologies Inc.


Appendix 1 – Income Statement
Exhibit 10 – Income Statement (C$ MM, except per share items)

                                      12 months       12 months    12 months    12 months    12 months    12 months    12 months    12 months
For the fiscal period ending         Dec-31-2009     Dec-31-2010 Dec-31-2011E Dec-31-2012E Dec-31-2013E Dec-31-2014E Dec-31-2015E Dec-31-2016E
Currency                                     CAD             CAD          CAD          CAD          CAD          CAD          CAD          CAD

Revenue                                     $0.76             $0.64     $0.75        $2.60        $7.50       $15.00       $35.00          $75.00
Other revenue                                   -                 -         -
Total revenue                               0.759             0.636     0.669          2.6          7.5         15.0         35.0            75.0

Cost of goods sold                          0.738              0.734     0.723
Gross profit                                0.021            (0.098)   (0.054)

Selling general & admin exp.                 1.69             1.639     1.642        2.362        3.275          4.0         7.15           15.95
Stock-based compensation                    0.183             0.358     0.248        0.248           0.5        0.55         0.55            0.55
R & D exp.                                      -                 -         -
Depreciation & amort.                       0.029             0.022     0.022        0.078        0.225         0.45         1.05            2.25
Other operating expense/(income)                -                 -         -

Other operating exp., total                 1.902             2.019     1.912        2.688          4.0          5.0         8.75           18.75

Operating income                           (1.881)           (2.117)   (1.966)     (0.088)          3.5         10.0        26.25           56.25
                                                                        -262%          -3%         47%          67%           75%             75%
Interest expense                           (0.768)           (0.314)    (0.34)      (0.34)       (0.34)       (0.34)        (0.34)          (0.34)
Interest and invest. income                      -                 -         -
 Net interest exp.                         (0.768)           (0.314)    (0.34)      (0.34)       (0.34)       (0.34)       (0.34)           (0.34)

Other non-operating inc. (exp.)                  -                 -         -
EBT excl. unusual items                    (2.649)           (2.431)   (2.306)     (0.428)         3.16         9.66        25.91           55.91

Impairment of goodwill                           -                 -         -
Gain (loss) on sale of invest.                   -           (0.544)   (0.544)
Other unusual items                           0.24             0.057     0.071
 EBT incl. unusual items                   (2.409)           (2.918)   (2.779)     (0.428)         3.16         9.66        25.91           55.91

Income tax expense                               -                 -         -                                              7.773          16.773
 Earnings from cont. ops.                  (2.409)           (2.918)   (2.779)     (0.428)         3.16         9.66       18.137          39.137

Earnings of discontinued ops.                    -                 -         -
Extraord. item & account. change                 -                 -         -
Net income to company                      (2.409)           (2.918)   (2.779)     (0.428)         3.16         9.66       18.137          39.137

Minority int. in earnings                        -                 -         -
Net income                                 (2.409)           (2.918)   (2.779)     (0.428)         3.16         9.66       18.137          39.137


NI to common incl extra items              (2.409)           (2.918)   (2.779)     (0.428)         3.16         9.66       18.137          39.137
NI to common excl. extra items             (2.409)           (2.918)   (2.779)     (0.428)         3.16         9.66       18.137          39.137

Per share items
Basic EPS                                  (0.017)        (0.018)      (0.017)     (0.003)        0.019        0.058        0.109           0.234
Basic EPS excl. extra items                (0.017)        (0.018)      (0.017)     (0.003)        0.019        0.058        0.109           0.234
Weighted avg. basic shares out.           140.434        162.899         188.8    167.097       167.097      167.097      167.097         167.097

Diluted EPS                                (0.017)        (0.018)      (0.017)     (0.002)        0.014        0.044        0.083           0.179
Diluted EPS excl. extra items              (0.017)        (0.018)      (0.017)     (0.002)        0.014        0.044        0.083           0.179
Weighted avg. diluted shares out.         140.434        162.899         188.8       218.8        218.8        218.8        218.8           218.8


EBITDA                                     (1.853)           (2.095)   (1.944)       0.137         3.95        11.05         28.5           56.25
EBIT                                       (1.881)           (2.117)   (1.966)     (0.088)          3.5         10.0        26.25           56.25
Tax rate                                       NA                NA        NA           NA          NA           NA          30%             30%
Source: Company Reports, Byron Capital Markets, Capital IQ



Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                                      P a g e | 17
                                                                                              Northcore Technologies Inc.


                               Appendix 2 – Management
                               Dr. Amit Monga - President & Chief Executive Officer
                               Dr. Monga is a highly respected thought leader in business circles in North America on
                               new technologies, software trends and business models, and he brings a unique
                               background in technology and capital markets to NTI. He currently serves on the Board
                               of Poynt Corporation. He is a successful angel investor who has previously worked as
                               an investment banker, venture capitalist and has founded a U.S.-based on-demand
                               procurement software company that was acquired by a NASDAQ-listed company.
                               Dr. Monga received his Ph.D. in Mechanical Engineering from the University of Alberta,
                               specializing in advanced genetic algorithms, where he currently serves as a Member of
                               Dean's Business Advisory Council at the Alberta School of Business.
                               Jim Moskos - Chief Operating Officer
                               Mr. Moskos is COO of the company and has spent more than 20 years in the
                               management, development, delivery and deployment of large scale, mission-critical,
                               information technology solutions for a wide array of clients. Mr. Moskos was a
                               recipient of the 1996 and 1998 Canadian Information Productivity Award from
                               Canadian Business Magazine, the 1995 Smithsonian Innovator Award for Information
                               Technology and the 1995 Government Technology Achievement Award. He is also a
                               two-time recipient of the Deputy Minister's Outstanding Achievement Award.
                               Don Clearwater - Director of Technology
                               Mr. Clearwater is responsible for NTI’s application development activities and
                               technology infrastructure. He has been with the company since 2000. Previously, he
                               worked with PricewaterhouseCoopers as a Manager in its Technology Risk Solutions
                               group, delivering technical recommendations to clients on Internet and security-related
                               activities. Mr. Clearwater has also worked with Nortel Networks Corporation, where he
                               held technical roles involving client delivery and project management.
                               Tam Nguyen - Corporate Controller
                               Mr. Nguyen is responsible for all of NTI’s financial and administrative activities. He has
                               been with the company since 2005 and brings over 10 years of finance experience to
                               his role. Mr. Nguyen is a Chartered Accountant and a graduate from the University
                               of Toronto.
                               Source: Company Reports




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                               P a g e | 18
                                                                                                                  Northcore Technologies Inc.

      IMPORTANT DISCLOSURES

      Analyst's Certification

      All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of the
      subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or indirectly,
      related to the specific recommendations or views expressed by the responsible analyst(s) in this report. The particulars contained herein
      were obtained from sources which we believe to be reliable but are not guaranteed by us and may be incomplete.

      Byron Capital Markets Ltd. (“Byron”) is a Member of IIROC and CIPF. Byron compensates its research analysts from a variety of sources.
      The research department is a cost centre and is funded by the business activities of Byron including institutional equity sales and trading,
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      Company Specific Disclosures

             1.   The research analyst(s) and/or associates who prepared our original research report have viewed the material operations of
                  this company.

      Investment Rating Criteria

      STRONG BUY                The security represents extremely compelling value and is expected to appreciate significantly from the
                                current price over the next 12-18 month time horizon.

      BUY                       The security represents attractive value and is expected to appreciate significantly from the current
                                price over the next 12-18 month time horizon.

      SPECULATIVE BUY           The security is considered a BUY but in the analyst’s opinion possesses certain operational and/or
                                financial risks that may be higher than average.

      HOLD                      The security represents fair value and no material appreciation is expected over the next 12-18 month
                                time horizon.

      SELL                      The security represents poor value and is expected to depreciate over the next 12-18 month time
                                horizon.

      Other Disclosures

      This report has been approved by Byron for distribution in Canada for the use of Byron’s clients. Clients wishing to effect transactions in
      any security discussed should do so through a qualified Byron salesperson, registered in their jurisdiction.

      Informational Reports

      From time to time, Byron will issue reports that are for information purposes only, and will not include investment ratings. These reports
      will be clearly labeled as appropriate.




Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                                       P a g e | 19
                                                                                                                             Northcore Technologies Inc.


    Company Directory
                                                                                     EXECUTIVE
     Campbell Becher                   Chief Executive Officer                                      647.426.1657   campbell@byroncapitalmarkets.com
     Geoff Clarke, MBA, LL.B., LL.M.   President and Chief Operating Officer                        416.867.8882   gclarke@byroncapitalmarkets.com
     Joe Ladeira                       Chief Compliance Officer                                     647.426.1660   jladeira@byroncapitalmarkets.com
     Gillian Wong-Hinds, CGA           Chief Financial Officer                                      416.867.8883   gwh@byroncapitalmarkets.com
                                                                               INVESTMENT BANKING
     Robert Orviss, CFA                Managing Director                                            647.426.1668   rorviss@byroncapitalmarkets.com
     Derrick Chiu                      Managing Director, Head of Equity Capital Markets            647.426.1662   derrick@byroncapitalmarkets.com
     Brad Freelan                      Vice President, Investment Banking                           416.867.3144   bfreelan@byroncapitalmarkets.com
     John Rak                          Vice President, Investment Banking                           604.697.2456   jrak@byroncapitalmarkets.com
     Chris Hobbs, CA                   Co-Head, Mergers and Acquisitions                            647.426.0467   chobbs@byroncapitalmarkets.com
     Greg Borsk, CA                    Co-Head, Mergers and Acquisitions                            647.426.0466   gborsk@byroncapitalmarkets.com
     Steve Lambros, MD                 Associate                                                    647.426.1659   slambros@byroncapitalmarkets.com
     Elisa Chio                        Associate                                                    647.426.0288   elisa@byroncapitalmarkets.com
     Mary Stuart                       Associate                                                    604.616.5311   mstuart@byroncapitalmarkets.com
     Russell Mills                     Associate                                                    647.426.0290   rmills@byroncapitalmarkets.com
     Marco Beretta                     Associate, Syndication                                       647.426.0289   mberetta@byroncapitalmarkets.com
     Jamie Grundman                    Analyst, Investment Banking                                  647.426.0469   jgrundman@byroncapitalmarkets.com
                                                                                     RESEARCH
     Guy Gordon, CFA, MBA              Managing Director, Head of Research, Oil & Gas Analyst       647.426.1672   guy@byroncapitalmarkets.com
     Jon Hykawy, PhD, MBA              Head of Global Research, Clean Tech and Materials Analyst    647.426.1656   jhykawy@byroncapitalmarkets.com
     Shawn Morgan                      Managing Editor & Production Coordinator                     647.426.0473   smorgan@byroncapitalmarkets.com
     Al P. Nagaraj, M.S., MBA          Special Situations Analyst                                   647.426.0291   anagaraj@byroncapitalmarkets.com
     Byron Berry, M.A., CFA            Strategist                                                   416.867.1623   bberry@byroncapitalmarkets.com
     Jeff Wu, CFA                      Mining Analyst                                               604.697.2455   jwu@byroncapitalmarkets.com
     Brian Szeto, M.A., CFA            Mining Analyst                                               647.426.1673   bszeto@byroncapitalmarkets.com
     Jonathan Lee, MBA                 Battery Materials and Technologies Analyst                   647.426.1674   jlee@byroncapitalmarkets.com
     Merril W. McHenry, CFA            Mining and Metals Analyst                                    647.426.1660   mmchenry@byroncapitalmarkets.com
     Omid Ameri                        Associate                                                    416.867.3984   oameri@byroncapitalmarkets.com
     Sandy Lam                         Associate                                                    416.867.2375   slam@byroncapitalmarkets.com
                                                                                  SALES & TRADING
     Trading Desk                      (main telephone line)                                        647.426.1670
     Nick Stajduhar                    Vice President, Head of Institutional Sales                  647.426.1664   nick@byroncapitalmarkets.com
     Jonathan Samahin, CFA             Vice President, Head of Global Trading                       647.426.1670   jsamahin@byroncapitalmarkets.com
     Tom Chudnovsky                    Vice President, Institutional Sales                          647.426.1665   tom@byroncapitalmarkets.com
     David Kemp                        Managing Director, Institutional Trading                     647.426.1666   dkemp@byroncapitalmarkets.com
     Cyrus Osena                       Vice President, Head of Business Development                 647.426.1675   cosena@byroncapitalmarkets.com
     Graham Farrell                    Institutional Sales & Trading                                647.426.1667   gfarrell@byroncapitalmarkets.com
     Kariv Oretsky                     Institutional Sales                                          647.426.1658   koretsky@byroncapitalmarkets.com
     Nick Perkell                      Institutional Trading                                        647.426.1671   nperkell@byroncapitalmarkets.com
     Mike Gardner                      Head of Proprietary Trading                                  416.867.8880   michaelgardner@byroncapitalmarkets.com
     Charles Pollock                   Proprietary Trader                                           416.967.8880   cpollock@byroncapitalmarkets.com
     Charlie Mitchell                  Proprietary Trader                                           416.469.9609   cmitchell@byroncapitalmarkets.com
     Taylor Davison                    Equity Trader                                                416.867.8880   tdavison@byroncapitalmarkets.com
     Patsy Fernandes                   Associate, Sales and Trading                                 416.867.2375   pfernandes@byroncapitalmarkets.com
                                                                 FINANCE, ADMINISTRATION AND OPERATIONS
     Kathy Sherban                     Sr. Vice President, Operations and Administration            416.867.1650   ksherban@byroncapitalmarkets.com
     Dale Sampson                      Compliance Officer                                           416.867.1569   dsampson@byroncapitalmarkets.com
     Ali Mohammad                      Controller / Regulatory Accountant                           416.364.2678   amohammad@byroncapitalmarkets.com
     Elisabeth Wightwick               Executive Assistant                                          416.867.8881   ewightwick@byroncapitalmarkets.com
     Dorothy Dudek                     Executive Assistant                                          647.426.0471   ddudek@byroncapitalmarkets.com
     Sandra Stefanescu                 Compliance Officer                                           641.426.0470   sstefanescu@byroncapitalmarkets.com
     Victoria Williston                Administrative Assistant                                     416.867.9800   vwilliston@byroncapitalmarkets.com
     Jen Levy                          Associate, Operations and Administration                     416.867.9064   jlevy@byroncapitalmarkets.com
     Sandra Day                        Office Manager – Vancouver                                   604.697.2540   sday@byroncapitalmarkets.com
     Zarina Belcher                    Office Manager – Toronto                                     647.426.1660   zbelcher@byroncapitalmarkets.com


                                                                         TORONTO VANCOUVER
                                                    4 KING STREET WEST, SUITE 1100 1075 WEST GEORGIA STREET, SUITE 1330
                                                            TORONTO, ON M5H 1B6 VANCOUVER, BC V6E 3C9


Al P. Nagaraj  647.426.0291  anagaraj@byroncapitalmarkets.com                                                                                      P a g e | 20

				
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