Core Insights - InterCure has entered into a definitive Share Purchase Agreement and a Collaboration Agreement with Cannasoul R&D Ltd, acquiring a 28% ownership stake in Cannasoul with an option to increase to 51% within two years [1][2] - The collaboration aims to combine InterCure's pharmaceutical platform with Cannasoul's research capabilities to develop evidence-based cannabis therapeutics [1][4] - The agreements come at a pivotal moment for the U.S. cannabis market, as the Trump administration is reportedly considering rescheduling cannabis, which could create significant opportunities for international cannabis companies like InterCure [2][4] Company Overview - InterCure Ltd. operates as Canndoc and is Israel's largest licensed cannabis producer, known for its pharmaceutical-grade medical cannabis products [5] - The company utilizes a vertically integrated "seed-to-sale" model and has a strong distribution network, positioning itself as a leader in the global cannabis market outside North America [5] Research and Development - Prof. Dedi Meiri, a prominent cannabis researcher, is expected to chair InterCure's newly established Scientific Advisory Board, enhancing the integration of Cannasoul's analytics into InterCure's operations [3][4] - The partnership aims to accelerate the development of next-generation cannabis therapeutics, leveraging Cannasoul's advanced research capabilities [3][4] Market Context - The potential rescheduling of cannabis from Schedule I to Schedule III by the Trump administration could transform the regulatory landscape, unlocking new opportunities for companies like InterCure [2][4]

Core Insights - InterCure Ltd. reported NIS 130 million in revenue for the first half of 2025, marking a 15% increase compared to the second half of 2024 and a 3% increase compared to the first half of 2024, alongside positive operating cash flow of NIS 12 million [5][2][1] - The company achieved positive Adjusted EBITDA for the eleventh consecutive half, demonstrating resilience amid challenging conditions, including the impact of the October 7 attack and the ongoing war in Gaza [2][3] - InterCure is strategically positioned to capitalize on evolving U.S. cannabis regulations, particularly following its agreement to acquire ISHI, which is expected to enhance its market presence and product offerings [1][3][5] Financial Highlights - Revenue for the first half of 2025 was NIS 130 million, with a net loss of NIS 1.8 million compared to near break-even in the first half of 2024 [5][14] - Adjusted EBITDA was NIS 12.6 million, representing 10% of revenue, and positive cash flow from operations was NIS 12 million, a significant improvement from negative cash flow of NIS 43 million in the same period last year [5][14] - Cash on hand increased to NIS 54 million as of June 30, 2025, compared to NIS 21 million a year earlier, indicating improved liquidity [5][12] Operational and Strategic Developments - The company resumed production, importation, and sales from its Nir Oz facility, delivering the first batches since the October 7 attack [5][2] - InterCure launched over 40 new SKUs during the first half of 2025, marking its first major product launches since October 2023 [5] - The company received NIS 81 million in compensation advances from Israeli authorities for war-related damages, part of a total claim of NIS 251 million [5][19] - The acquisition of ISHI is expected to strengthen InterCure's access to premium U.S. genetics and advanced cultivation technologies, contributing tens of millions of shekels to revenues [5][6]

Core Viewpoint - InterCure Ltd. is acquiring Botanico Ltd. (known as ISHI) to enhance its global cannabis portfolio and gain access to premium American cultivation technology and brand partnerships, coinciding with potential regulatory changes in the cannabis industry [1][6]. Group 1: Acquisition Details - The acquisition will provide InterCure with ISHI's advanced AI-driven cultivation technologies, automated production systems, and exclusive brand alliances with leading U.S. operators [2]. - The deal is structured in two phases: InterCure will initially purchase 50% of ISHI's equity for 2.47 million ordinary shares, with the remaining 50% to be acquired upon ISHI achieving sustained profitability for three months or within two years, in exchange for an additional 2.46 million shares [4]. - The total deal represents approximately 10% of InterCure's fully diluted outstanding stock, with closing expected in the first quarter of 2026, pending regulatory approvals in Israel [4]. Group 2: Strategic Implications - The acquisition allows InterCure to immediately access award-winning American cannabis genetics and operational expertise through partnerships, including one with The Flowery, a prominent medical cannabis firm in Florida [3]. - ISHI's co-founders will join InterCure's leadership team, and all employee stock options at ISHI will convert to InterCure options under existing vesting terms, facilitating integration [5]. - This strategic move is viewed as a significant milestone by InterCure's CEO, positioning the company to leverage regulatory momentum and exclusive access to U.S. brands [6].

Core Insights - InterCure Ltd. has announced the strategic acquisition of Botanico Ltd. (ISHI), enhancing its access to advanced cultivation technologies and premium American cannabis brands [1][4] - The acquisition aligns with the potential rescheduling of cannabis by the Trump administration, which could create significant opportunities for international cannabis operators like InterCure [1][4] Company Overview - InterCure is recognized as the leading and fastest-growing cannabis company outside North America, with a focus on pharmaceutical-grade medical cannabis products [7] - The company operates under the brand Canndoc and is Israel's largest licensed cannabis producer, leveraging a high-margin vertically integrated model [7] Acquisition Details - The acquisition involves a two-phase structure, with 50% of ISHI's equity acquired initially for 2,467,055 InterCure ordinary shares, and the remaining 50% contingent on ISHI achieving positive operating profitability or within 24 months [5] - The total consideration for the acquisition amounts to 4,924,261 ordinary shares, representing approximately 10% of InterCure's outstanding shares on a fully diluted basis [5] Strategic Partnerships - ISHI has established exclusive partnerships with top-tier U.S. cannabis brands, including The Flowery, which operates significant cultivation and retail facilities in Florida and New York [2] - The acquisition provides InterCure with immediate access to award-winning cannabis genetics and advanced operational technologies, enhancing its competitive position in the global medical cannabis market [2][4] Management and Operational Integration - The founders of ISHI will join InterCure's leadership team, ensuring a smooth transition and integration of operations [5][6] - The operational integration will allow for immediate access to ISHI's product supply and technology platform, supporting InterCure's expansion into international markets [5]

Core Insights - InterCure has announced the strategic acquisition of Botanico Ltd. (ISHI), enhancing its access to advanced cultivation technologies and premium American cannabis brands, coinciding with potential regulatory changes in the U.S. cannabis market [1][4] - The acquisition is expected to provide InterCure with immediate access to award-winning cannabis genetics and operational technologies, positioning the company to capitalize on evolving regulatory frameworks favoring compliant operators [2][4] Company Overview - InterCure Ltd. (dba Canndoc) is recognized as the leading and fastest-growing cannabis company outside North America, with a focus on pharmaceutical-grade medical cannabis products and a vertically integrated "seed-to-sale" model [7] Acquisition Details - The acquisition of ISHI involves a two-phase structure, with 50% of equity acquired initially for 2,467,055 InterCure ordinary shares, and the remaining 50% contingent on ISHI achieving positive operating profitability or within 24 months [5] - The total consideration for the acquisition amounts to 4,924,261 ordinary shares, representing approximately 10% of InterCure's outstanding shares on a fully diluted basis [5] Strategic Partnerships - ISHI has established exclusive partnerships with top-tier U.S. cannabis brands, including The Flowery, which operates significant cultivation and retail facilities in Florida and New York [2][6] - The acquisition is expected to enhance InterCure's supply chain and distribution operations, supporting its expansion into international markets where pharmaceutical-grade standards are becoming the benchmark [5][6] Regulatory Context - The acquisition aligns with the reported momentum in the U.S. regarding potential cannabis rescheduling, which could unlock significant opportunities for international cannabis companies like InterCure [1][4]

[Headline Summary & Outlook](index=1&type=section&id=Headline%20Summary%20%26%20Outlook) InterCure's FY2024 results, Q1 2025 outlook, and strategic developments, including international expansion and facility recovery [FY2024 Results and Q1 2025 Update Overview](index=1&type=section&id=FY2024%20Results%20and%20Q1%202025%20Update%20Overview) This section provides a high-level overview of InterCure's financial performance for FY2024, reporting NIS 239 million in revenue and NIS 24 million in Adjusted EBITDA, alongside a strong Q1 2025 outlook with expected sequential growth of over 25%. The results were impacted by the October 7th terrorist attack and the ongoing war, for which the company is receiving compensation FY2024 Financial Performance | Metric | Value (NIS Million) | | :----- | :------------------ | | Revenue | 239 | | Adjusted EBITDA | 24 | | Adjusted EBITDA Margin | ~10% | | Cash on Hand (end 2024) | 80 | | Compensation Received (until Dec 31, 2024) | 62 | | Compensation Received (to date) | 82 | | Funding Secured | 66 | | Additional Funding from Authorities | 20 | - **Q1 2025 Outlook:** Expected sequential growth of **over 25%** to **over NIS 70 million**[5](index=5&type=chunk) - Expects continued **double-digit growth** throughout 2025[5](index=5&type=chunk) - Positive Adjusted EBITDA expected for Q1 2025[5](index=5&type=chunk) - **Impact of October 7th Attack:** 2024 results were affected by damages to the southern facility caused by the terrorist attack on October 7, 2023, and the continued war in Gaza[5](index=5&type=chunk) - InterCure is entitled to **full compensation** from the Israeli authorities for all direct and indirect damages caused to the southern facility[5](index=5&type=chunk) [Key Highlights and Strategic Developments](index=1&type=section&id=Key%20Highlights%20and%20Strategic%20Developments) InterCure maintained profitability for 18-19 consecutive quarters despite war impacts, expanded its strategic partnership with Cookies™ to Germany, and is actively restoring its Nir Oz facility, enabling new product launches and international expansion - **Profitability:** The second half of 2024 ended with positive Adjusted EBITDA and represents InterCure's **eighteenth and nineteenth consecutive quarters of profitability**[5](index=5&type=chunk) - **International Expansion:** InterCure announced expansion of its strategic partnership with Cookies™ to Germany and expects to launch first Cookies products in Germany during the upcoming months[5](index=5&type=chunk) - **Facility Recovery & Product Launches:** Restoring the southern facility continues at full force, enabling the Company to return to profitable growth, including exercising the Cookies agreement and expanding international operations in Germany, the UK, and beyond[5](index=5&type=chunk) - First launches since October 2023 of **over 20 SKUs** including the first Nir Oz products while experiencing solid global demand for CANNDOC products[5](index=5&type=chunk) - To meet up with the global demand InterCure promoting a significant development and expanding of the Nir Oz Facility in collaboration with "Tkumah" administration and other authorities in Israel[5](index=5&type=chunk) [FY2024 Financial Performance and Milestones](index=2&type=section&id=FY2024%20Financial%20Performance%20and%20Milestones) InterCure's FY2024 financial results, CEO remarks, operational milestones, and historical data, highlighting war impacts [CEO's Remarks](index=2&type=section&id=Alexander%20Rabinovich%2C%20CEO%20and%20Chairman%20of%20InterCure%20noted) CEO Alexander Rabinovich highlighted InterCure's resilience in 2024 despite challenges from the October 7th attack and ongoing war, emphasizing continued revenue generation with positive Adjusted EBITDA and a focus on growth. He expressed confidence in double-digit growth, international expansion, and leadership in the pharmaceutical cannabis industry for 2025, while also hoping for peace and supporting regional recovery - **Resilience & Growth Focus:** Despite unprecedented challenges in 2024, including the impact of the October 7th attack on the Nir Oz facility and ongoing war in Gaza, InterCure remained resilient, generating revenues with **positive Adjusted EBITDA**, and focused on growth[8](index=8&type=chunk) - **Nir Oz Recovery:** Following the successful completion of **NIS 66 million funding**, the company is accelerating the recovery of its Nir Oz facility and has already resumed product launches from the site[8](index=8&type=chunk) - **2025 Outlook:** As the company enters 2025, it is seeing strong demand across global markets and is confident in its ability to continue delivering **double-digit growth**, expand international operations, and lead the Pharmaceutical cannabis industry forward[8](index=8&type=chunk) - **Commitment to Recovery:** The company is committed to playing a meaningful role in the region's recovery and rebuilding efforts in the aftermath of tragic events[9](index=9&type=chunk) [Detailed Financial and Operational Milestones](index=2&type=section&id=FY2024%20Financial%20Highlights%20and%20Milestones) InterCure reported annual revenue of NIS 239 million and Adjusted EBITDA of NIS 24 million for FY2024, maintaining profitability for 18-19 consecutive quarters. The company secured NIS 66 million in funding for its Nir Oz facility recovery, expanded its European footprint with Cookies™ agreements, and grew its medical cannabis pharmacy chain to 25 active locations FY2024 Financials | Metric | Value (NIS Million) | | :----- | :------------------ | | Annual Revenue | 239 | | Adjusted EBITDA | 24 | | Adjusted EBITDA Margin | ~10% | - **Profitability:** H2/2024 represents the **eighteenth and nineteenth consecutive quarters of profitability**[10](index=10&type=chunk) - **War Compensation:** InterCure received **NIS 62 million** until December 31, 2024 (to date, **NIS 82 million**) as partial advanced payments from the Israeli authorities and expects to receive additional substantial payments to cover war-related damages[10](index=10&type=chunk) - **Cash Position:** The Company ended 2024 with cash on hand of **NIS 80 million**[10](index=10&type=chunk) - **European Expansion:** Expands its European footprint with new strategic agreements with Cookies™, enhancing branded product offerings and expecting to launch Cookies Corners licensed pharmacies in Germany and UK, alongside differentiated online platforms[10](index=10&type=chunk) - **Domestic Expansion:** Continued expansion of the Company's dedicated medical cannabis pharmacy chain to a total of **25 active locations** as of today[10](index=10&type=chunk) - **Funding Secured:** Secured Funding of **NIS 66 million** to support the recovery of Nir Oz Facility, which may increase to **NIS 107 million** to support the expansion of the facility in collaboration with the "Tkumah" administration[10](index=10&type=chunk) - The funding includes investments from key shareholders[10](index=10&type=chunk) - **Future Growth & Product Pipeline:** After the October 7, 2023 terrorist attack effects on revenues and operations in 2024, the Company expects to resume sequential quarterly growth during 2025[10](index=10&type=chunk) - As the restoration of the Nir Oz facility continues, CANNDOC will resume launching during 2025 with a pipeline of **over 80 GMP SKUs**, including Cookies, Binske and new brands[10](index=10&type=chunk) [Historical Financial Data](index=3&type=section&id=Company%27s%20Revenues%20and%20Adjusted%20EBITDA%202021-2024) This section presents a historical overview of InterCure's revenues, net income, and Adjusted EBITDA from 2021 to 2024, highlighting the impact of the October 7th terrorist attack and the war in Gaza on 2024 and 2023 results Historical Financial Performance (2021-2024) | Metric | 2024 (NIS '000) | 2023 (NIS '000) | 2022 (NIS '000) | 2021 (NIS '000) | | :---------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Revenues | 238,845 | 355,553 | 388,684 | 219,677 | | Net Income | (72,793) | (63,533) | 43,749 | 7,294 | | Adjusted EBITDA | 24,193 | 60,870 | 84,125 | 56,897 | - **Note on 2023-2024 Results:** Results for 2024 and 2023 were affected by damages to the southern facility caused by the terrorist attack on October 7, 2023, and the continued war in Gaza[11](index=11&type=chunk) [Company Profile and Financial Definitions](index=3&type=section&id=Company%20Profile%20and%20Financial%20Definitions) InterCure's market position, business model, non-IFRS measures definition, and Adjusted EBITDA reconciliation [About InterCure (dba Canndoc)](index=3&type=section&id=About%20InterCure%20%28dba%20Canndoc%29) InterCure, operating as Canndoc, is a leading, profitable, and fast-growing cannabis company outside North America. It is Israel's largest licensed cannabis producer, offering GMP-certified, pharmaceutical-grade medical cannabis products through a vertically integrated "seed-to-sale" model and extensive distribution network - **Market Position:** InterCure (dba Canndoc) is the **leading, profitable, and fastest growing cannabis company** outside of North America[12](index=12&type=chunk) - **Subsidiary:** Canndoc, a wholly owned subsidiary of InterCure, is **Israel's largest licensed cannabis producer** and one of the first to offer Good Manufacturing Practices (GMP) certified and pharmaceutical-grade medical cannabis products[12](index=12&type=chunk) - **Business Model:** InterCure leverages its market leading distribution network, best in class international partnerships and a high-margin vertically integrated "seed-to-sale" model to lead the fastest growing cannabis global market outside of North America[12](index=12&type=chunk) [Non-IFRS Measures Definition](index=3&type=section&id=Non-IFRS%20Measures) This section defines Adjusted EBITDA as a non-IFRS financial measure used by InterCure. It represents earnings before interest, income taxes, depreciation, and amortization, further adjusted for changes in fair value of inventory, share-based payment expense, impairment losses, non-controlling interest, and other expenses/income. The company uses this measure to provide useful information on operating and financial performance, acknowledging it may not be comparable to similar measures from other companies - **Adjusted EBITDA Definition:** Earnings before interest, income taxes, depreciation, and amortization, adjusted for changes in the fair value of inventory, share-based payment expense, impairment losses (and gains) on financial assets, non-controlling interest and other expenses (or income)[13](index=13&type=chunk) - **Purpose:** InterCure uses this measure because it believes it provides useful information to both management and investors with respect to the operating and financial performance of the Company[13](index=13&type=chunk) - **Comparability:** This measure is not a recognized measure under IFRS, does not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies[13](index=13&type=chunk) [Adjusted EBITDA Reconciliation](index=3&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20net%20income) This section provides a detailed reconciliation of Adjusted EBITDA to net income for the years 2021 through 2024, breaking down adjustments such as financing costs, tax expenses, depreciation, share-based payments, and fair value adjustments Adjusted EBITDA Reconciliation (2021-2024) | Metric | 2024 (NIS '000) | 2023 (NIS '000) | 2022 (NIS '000) | 2021 (NIS '000) | | :------------------------------------ | :-------------- | :-------------- | :-------------- | :-------------- | | Revenues | 238,845 | 355,553 | 388,684 | 219,677 | | Net Income | (72,793) | (63,533) | 43,749 | 7,294 | | Financing cost (net) | 20,116 | 19,719 | 6,786 | 9,451 | | Tax expenses | (14,530) | 2,248 | 93 | 11,441 | | Depreciation and amortization | 15,371 | 13,166 | 11,699 | 7,393 | | Share-based payments | 2,281 | 2,592 | 8,907 | 6,451 | | Other expenses (exclude other income from the Tax authorities) | 62,497 | 75,289 | 2,128 | 2,971 | | Changes in the fair value of financial assets | (340) | 666 | 174 | 1,868 | | Fair value adjustment to inventory | 5,360 | 3,244 | 3,874 | 4,858 | | Adjusted EBITDA (Consolidated) | 17,962 | 53,392 | 77,411 | 51,727 | | Non cannabis sector expenses | 6,231 | 7,479 | 6,715 | 5,170 | | Adjusted EBITDA (Cannabis Sector) | 24,193 | 60,871 | 84,126 | 56,897 | [Important Disclosures](index=4&type=section&id=Important%20Disclosures) Cautionary forward-looking statements, inherent risks, and contact information for InterCure Ltd [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section contains cautionary statements regarding forward-looking information, which are based on management's assumptions and subject to risks and uncertainties. These risks include global expansion success, continued growth, market conditions, the impact of the COVID-19 pandemic, the war in Israel and Ukraine, changes in laws, public perception of the cannabis industry, and reliance on senior management expertise. Actual results may differ materially from projections - **Nature of Statements:** This press release contains forward-looking statements, often characterized by terminology such as "believes," "hopes," "may," "anticipates," "should," "intends," "plans," "will," "expects," "estimates," "projects," "positioned," "strategy" and similar expressions[15](index=15&type=chunk) - **Risks and Uncertainties:** Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially, including the Company's success of its global expansion plans, its continued growth, the impact of the COVID-19 pandemic, the impact of the war in Israel and the war in Ukraine, changes in applicable laws, the U.S. regulatory landscapes and enforcement related to cannabis, changes in public opinion and perception of the cannabis industry, and reliance on the expertise and judgment of senior management[15](index=15&type=chunk) [Contacts](index=4&type=section&id=Contacts) Provides contact information for InterCure Ltd., specifically for Amos Cohen, Chief Financial Officer - **Contact Person:** Amos Cohen, Chief Financial Officer[16](index=16&type=chunk) - **Email:** amos@intercure.co[16](index=16&type=chunk)

Core Viewpoint - InterCure Ltd. demonstrated resilience in 2024 despite significant challenges, including the impact of the October 7th attack and ongoing conflict in Gaza, achieving revenues of NIS 239 million and positive Adjusted EBITDA of NIS 24 million, while focusing on growth and recovery efforts [4][6]. Financial Performance - Revenues for the year ended December 31, 2024, were NIS 239 million, a decrease from NIS 355.6 million in 2023 [7]. - Adjusted EBITDA for 2024 was NIS 24 million, approximately 10% of revenues, compared to NIS 60.9 million in 2023 [7]. - The company ended 2024 with cash on hand of NIS 80 million [6]. Operational Highlights - InterCure's southern facility was damaged due to the October 7, 2023, attack, but the company is entitled to full compensation from Israeli authorities, having received NIS 62 million in partial payments [6]. - The company expects to continue double-digit growth throughout 2025, with a strong start to Q1 2025 projected at over NIS 70 million in revenues [6]. - InterCure is expanding its strategic partnership with Cookies™ into Germany, with product launches expected soon [6]. Market Position and Strategy - InterCure is recognized as the leading cannabis company outside North America, leveraging a vertically integrated "seed-to-sale" model [8]. - The company is enhancing its product offerings through strategic agreements and expanding its dedicated medical cannabis pharmacy chain to 25 active locations [6][8]. - The company plans to restore and expand the Nir Oz facility in collaboration with local authorities, aiming to meet global demand for its products [6].

Facility Damage and Recovery - The Southern Facility suffered significant damage due to attacks from Hamas, and the company is currently in the process of restoring it as part of its war recovery plan[48]. - The company experienced significant damage to its Southern Facility due to attacks from Hamas, which has been designated as a closed military area by Israeli authorities[105]. - The Southern Facility in Nir Oz suffered extensive destruction, resulting in the near-total devastation of cultivation areas, greenhouses, irrigation systems, and electrical infrastructure, rendering it completely inoperative and uninhabitable[170]. - The company is in the process of restoring the Southern Facility as part of its war recovery plan and is working with Israeli authorities to obtain full compensation for the damages[105]. - As of the date of the Annual Report, the Company has received tens of millions of shekels as advance payments from Israeli authorities for damages caused by the terrorist attack and the war in Gaza[172]. - The Company secured NIS 66 million (approximately $18.2 million) in financing to support the recovery of the Southern Facility, with potential total proceeds of approximately NIS 107 million (approximately $29.8 million) if warrants are fully exercised[172]. - The ongoing war has led to the absence of personnel in Israel, but as of the report date, all personnel except those at the Southern Facility have returned to full capacity[170]. - The intensity and duration of the current war against Hamas and its economic implications remain unpredictable, with potential adverse effects on the Company's operations[173]. - The Company is entitled to full compensation for damages under Israeli law, and management is actively working with authorities to secure this compensation[172]. Regulatory and Compliance Challenges - The company is dependent on regulatory approvals and licenses for the production and distribution of pharmaceutical-grade cannabis products, which are subject to ongoing compliance requirements[39]. - The medical-use cannabis industry is highly regulated, and changes in laws or regulations could materially affect the company's operations[36]. - The company is subject to various U.S. and foreign laws regarding cannabis production and distribution, which could lead to significant fines or penalties if violated[75]. - The company may face increased legal and financial compliance costs due to changing laws and regulations, which could divert management's focus from revenue-generating activities[123]. - Regulatory uncertainties, such as proposed anti-dumping duties of 175% on imports from Canada, could increase costs and impact pricing dynamics in the Israeli medical cannabis market[68][69]. - The company is subject to risks related to the protection and enforcement of intellectual property rights, which could adversely affect its ability to commercialize products[35]. - The company has submitted trademark applications in multiple jurisdictions, including Israel, Canada, the U.S., and EU member states, to protect its intellectual property rights[152]. - The company has obtained protected breeding rights for five unique genetics in Israel and is pursuing additional rights in various jurisdictions[153]. - The company relies on trade secret protection and confidentiality agreements to safeguard its proprietary technologies and products[154]. - The company may face challenges in obtaining and maintaining effective protections for its intellectual property rights, which could harm its competitive position[157]. Financial Performance and Risks - The company experienced negative cash flow from operating activities for the years ended December 31, 2024 and December 31, 2023, following positive cash flow in 2022 and 2021, primarily due to the impacts of the October 7, 2023 attacks and the subsequent war in Gaza on its Southern Facility[84]. - Economic conditions, including inflation and geopolitical events, may adversely affect the company's operating results and financial condition, potentially leading to slower sales cycles and increased price competition[55]. - The company is exposed to risks related to inflation, which could raise costs for commodities, labor, and materials, impacting financial condition and cash flows[56]. - The company may continue to finance its growth with debt, which could increase its debt levels above industry standards[120]. - The company incurs increased costs due to operating as a public company listed on both U.S. and Israeli securities exchanges, impacting its financial condition[121]. - The company may face challenges in attracting and retaining key personnel necessary for its continued growth and operational success[99]. - The company may face adverse impacts on financial results due to its equity compensation plan, which could create volatility in financial statements[144]. - Legal proceedings may arise, potentially leading to substantial defense and settlement costs, which could adversely affect the company's financial position[146]. Market and Competitive Landscape - The company anticipates competition from both licensed producers and unregulated market participants, which may affect market share and revenue[65][71]. - The company must build brand awareness and invest in production capacity to compete effectively in the medical-use cannabis industry[63]. - The success of the company's business model depends on the continued growth of the medical-use cannabis market and its ability to attract and retain patients[62]. - The company is classified as an emerging growth company and can rely on exemptions from certain disclosure requirements until December 31, 2026, or until it exceeds $1.235 billion in total annual gross revenue[125]. - The company is continuously seeking new strategic agreements for distribution partnerships in target markets, despite some previous agreements becoming invalid[221]. - The company is establishing joint ventures and distribution arrangements in the EU and Canada to expand its global production and distribution capabilities[221]. - The company operates 28 pharmacies across Israel, the UK, and Austria, with 25 already possessing permits for distributing medical cannabis[223][224]. - In July 2024, the company completed the acquisition of Leon Pharm, enhancing its presence in the medical cannabis pharmacy sector in Israel[225]. Operational Challenges - The company may face operational challenges and liquidity risks due to potential future resurgences of COVID-19 or other pandemics, which could disrupt normal business operations and access to capital[52]. - The company relies on joint ventures for production and distribution outside of Israel, facing risks if partners fail to meet obligations[86]. - The company depends on third-party transportation services for product distribution, and any disruptions could materially affect sales volumes[91]. - The company may face product recalls due to contamination or quality assurance concerns, which could incur significant costs and damage its reputation[93]. - The company is exposed to potential liability from fraudulent or illegal activities by employees and contractors, which could harm its reputation and financial condition[100]. - The company may not be able to manage its expanding operations effectively, which could hinder its ability to meet demand and achieve profitable operations[118]. - The company is subject to operational risks, including potential disruptions from inadequate technology or external events, which could lead to financial loss or reputational damage[137]. Production Capacity and Future Growth - The company has two main production facilities: the Northern Facility and the Southern Facility, aimed at increasing production capabilities and expanding global distribution[215]. - The Southern Facility in Kibbutz Nir Oz has a gross area of 1.7 million square feet, with 600,000 square feet currently in use, producing 7 to 10 tons of cannabis annually[216]. - The company aims to triple the capacity of the Southern Facility, potentially allowing for the production of approximately 88 tons of pharmaceutical-grade cannabis per year once fully operational[219]. - The Northern Facility has a gross area of 55,000 square feet, capable of producing up to 3 tons of pharmaceutical-grade cannabis annually, with plans to expand to 160,000 square feet, increasing total capacity to 10 tons[220]. - The company’s future growth is dependent on its ability to develop and commercialize its production know-how and expand its distribution network in regulated markets[215]. - The company has not completed any clinical trials using cannabis or cannabis-based products to date, and future trials may be expensive and time-consuming[50]. - The company has received IMCA feasibility approval to initiate nine clinical trials, with one phase 3 trial currently underway, although recruitment has faced delays due to COVID-19[226].

Core Viewpoint - InterCure Ltd. announces the resignation of Mr. Ehud Barak as Chairman of the Board, effective February 13, 2025, with Mr. Alexander Rabinovich succeeding him as Chairman [1][2] Group 1: Leadership Changes - Mr. Ehud Barak, marking his 83rd birthday, steps down after six years of service, pursuing personal endeavors [2] - Mr. Alexander Rabinovich, who has been CEO for the past five years, will take over as Chairman, having led the company to significant profitable growth and strategic partnerships [1][5] Group 2: Financial Developments - InterCure completed a financing round securing NIS 66 million (approximately $18.2 million) to support the recovery of the Nir Oz Facility, with potential proceeds increasing to NIS 107 million (approximately $29.8 million) if warrants are fully exercised [3] - Key shareholders, including the CEO and lead investors, participated in the financing, which also included a loan agreement from a leading Israeli bank [3] Group 3: Recovery and Growth Strategy - The company is executing a war recovery plan to restore the Nir Oz facility, re-launch products, and rebuild its pharmaceutical cannabis portfolio [4] - InterCure aims to complete rehabilitation of the Nir Oz facility and secure compensation for war-related damages, which is essential for returning to profitable growth [5] - The company is focused on expanding international operations in Germany, the UK, and Australia, leveraging its successful financing round to reinforce its market position [5][7]

Core Viewpoint - InterCure Ltd. has secured funding commitments totaling NIS 66 million (approximately USD 18.2 million), which may increase to NIS 107 million (approximately USD 29.8 million) to support the recovery and expansion of its operations post-war [10][11]. Funding and Investment - The company received a binding commitment from a leading Israeli bank for a loan of NIS 30 million (approximately USD 8.3 million) for up to 24 months, contingent on closing conditions including a private placement [1]. - Key shareholders, including CEO Alexander Rabinovich, Yaron Yakobi, and Tzahi Hagag, are committing to invest in the company, resulting in each holding over 5% of the company's share capital post-investment [3]. - The private placement involves issuing 7,349,896 ordinary shares at a price of NIS 4.83 (approximately USD 1.34) per share, with potential additional proceeds of up to NIS 77 million (approximately USD 21.5 million) if warrants are fully exercised [3]. Recovery and Growth Strategy - The funding will enable the company to complete post-war recovery processes and return to profitable growth, including expanding international operations in Germany, the UK, and Australia [2][11]. - The company is working closely with Israeli authorities to receive additional substantial payments for war-related damages, which will further support its recovery efforts [4][17]. - InterCure aims to double its production capacity in Israel and enhance its product portfolio using advanced technologies as part of its global growth strategy [12]. Market Position - InterCure, operating as Canndoc, is recognized as the leading and fastest-growing cannabis company outside North America, with a strong distribution network and a vertically integrated "seed-to-sale" model [6].