Core Insights - InterCure Ltd. has demonstrated resilience in H1 2024, reporting revenues of 126 million NIS ($33.97 million), exceeding the estimated 121 million NIS [1] - The company is still below pre-October 2023 revenue levels of 414 million NIS due to disruptions at its southern Israeli facility occupied by the IDF [2] - InterCure's EBITDA for H1 2024 was reported at 17.6 million NIS, significantly higher than the 5 million NIS estimate, aided by government compensation for damages [4] Financial Performance - Cash reserves have decreased from 111 million NIS in December 2023 to 21 million NIS by the end of June 2024 [5] - Net debt increased from 60 million NIS to 112 million NIS during the same period, although the company has access to an unused credit line of over 22 million NIS [5] Future Outlook - InterCure is guiding for double-digit sales growth in H2 2024, with expected revenues around 140 million NIS, revised down from previous estimates of 180 million NIS [6] - The company plans to launch over 30 new GMP SKUs in collaboration with brands such as Cookies, Binske, and Organigram OGI, with Cookies products expected to be introduced in Germany by Q4 2024 [6] Stock Performance and Valuation - The stock price has declined from a peak of $3.12 in May 2024 to $1.97, yet the valuation remains attractive, trading at 1x sales and 8x EBITDA for CY25 [7] - InterCure's enterprise value is estimated at $132 million, comprising $96 million in market capitalization and $36 million in net debt [7]

Core Insights - InterCure reported revenues of NIS 126 million and an Adjusted EBITDA of NIS 21 million for the first half of 2024, representing approximately 17% of revenues, despite challenges from the October 7 terrorist attack and the ongoing war in Gaza [1][3][4] - The company has achieved profitability for 17 consecutive quarters, with both Q1 and Q2 of 2024 showing positive EBITDAs and operational profits [1][3][4] - InterCure is entitled to full compensation from Israeli authorities for damages to its Southern Facility and has received tens of millions of NIS in advance payments [1][3][4] Financial Performance - Revenue for the first half of 2024 was NIS 126 million, down from NIS 147 million in the second half of 2023, which was only partially affected by the recent conflicts [3][5] - The operating profit for the first half of 2024 was NIS 11 million, with a gross profit of NIS 40.4 million, resulting in a gross profit margin of 32% [3][5] - The company expects double-digit growth in the second half of 2024 compared to the first half, driven by product launches in Germany and the UK [1][3][4] Strategic Developments - InterCure announced an expansion of its strategic partnership with Cookies™ into the German market, with plans to launch Cookies products in Q4 2024 [1][3][4] - The company is expanding its medical cannabis pharmacy chain to a total of 24 active locations and plans to introduce over 30 new GMP SKUs in the second half of 2024 [3][4] - The restoration of the Southern Facility is ongoing, supported by advance payments from Israeli authorities, and is expected to return to full capacity in the coming quarters [1][3][4] Market Position - InterCure is recognized as the leading and fastest-growing cannabis company outside North America, leveraging a vertically integrated "seed-to-sale" model [6] - The company holds 100% of Cannolam LTD and the full rights to Cookies™ international agreements, enhancing its product offerings [3][4] - The CEO emphasized the company's commitment to providing high-quality, pharma-grade cannabis and creating shareholder value, particularly in the growing German market [4]

onuma Inthapong/E+ via Getty Images Investing Thesis InterCure (NASDAQ:INCR), a leading pharmaceutical/medical cannabis company based in Israel, and a global leader outside North America, has been hit hard by the Hamas attack and the war that followed and so has its stock. Despite these facts, the company managed to sustain operations and present positive 2023 results; the stock price also started recovering after market overreaction. While having the support of the state of Issael during this diffieult sit ...

Exhibit 99.1 InterCure Announces FY2023 Results: Revenue of NIS 356 million and Adjusted EBITDA of NIS 61 million NEW YORK & HERZLIYA, Israel, April 30, 2024- InterCure Ltd. (NASDAQ: INCR) (TASE: INCR) ("InterCure" or the "Company") today announced results for the full year ending December 31, 2023. All amounts are expressed in New Israeli Shekels (NIS), unless otherwise noted. FY2023 Financial Highlights and Milestones Adjusted EBITDA means EBITDA for the cannabis sector adjusted for changes in the fair va ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTIO ...

Morsa Images InterCure Ltd. (NASDAQ:INCR) has surprisingly rallied sharply off the post October 7 lows despite not having access to a prime facility in Israel. The cannabis business likely deserves a better stock valuation, but the dust needs to settle in both the Israel cannabis market and the conflict with Hamas. My investment thesis remains Bullish on the cannabis stock, even after the double off the lows already. Source: Finviz Still Waiting No matter where in the globe, cannabis has constantly been hit ...

Exhibit 99.1 Second Quarter and First Half 2023 Key Financial Highlights Second Quarter and First Half 2023 Key Operating Highlights All amounts are expressed in New Israeli Shekels (NIS) or Canadian Dollar ($). InterCure Announces Record Revenues First Half of 2023 with over 14% growth YOY Achieved record revenues of NIS 209 million ($75 million) for the first half of 2023 Annualized revenue run rate of NIS 417 million ($149 million) Adjusted EBITDA of NIS 30 million ($11 million) Generated NIS 35 million ...

Regulatory Compliance - The medical-use cannabis industry is highly regulated, and compliance with laws and regulations is critical for the company's operations[37]. - The company holds licenses for breeding, cultivating, and distributing pharmaceutical-grade cannabis in Israel, including IMC-GAP, IMC-GMP, IMC-GDP, and IMC-GSP certifications[40]. - Regulatory approvals for import/export permits are essential for the company's strategic partnerships with brands like Tilray and Organigram[45]. - Compliance with evolving regulations is critical, as failure to do so may result in penalties and operational disruptions[73]. - The company is subject to various laws and regulations regarding money laundering, which could disrupt operations and incur significant costs if violated[74]. - The company's ability to conduct cannabis-related activities in Israel is contingent upon compliance with IMCA regulations, which impose strict ownership limits[175]. - Changing laws and regulations may increase compliance costs and create uncertainty, potentially harming business operations[116]. Clinical Trials and Research - The company has received IMCA feasibility approval to initiate nine clinical trials, with one phase 3 clinical trial currently underway[49]. - The company may face significant delays in clinical trials due to COVID-19 challenges, impacting its ability to conduct and complete studies[49]. - Future research and clinical trials may yield negative conclusions regarding the medical benefits of cannabis, impacting product distribution and regulatory approvals[51]. - The company is currently providing products for one active clinical study but does not have ownership of the intellectual property generated from this study[154]. - The company is considering the possibility of canceling its clinical program due to significant delays and changes in market conditions[198]. Financial Performance and Risks - The company has not paid dividends on its ordinary shares, which may affect investor returns unless the securities appreciate in value[36]. - The company is exposed to risks related to currency fluctuations and inflation, which could adversely affect its financial condition[36]. - Increased inflation raises costs for commodities, labor, and materials, potentially impacting financial condition and cash flows[57]. - Recent bank closures have created liquidity risks, which may impair access to working capital and increase financing costs[58]. - Future revenues are difficult to forecast due to the underdeveloped medical-use cannabis market, potentially impacting financial stability[80]. - Additional financing will be necessary for continued business development, and there is no assurance that such financing will be available on favorable terms[111]. - The market price of the company's shares may be volatile due to various factors, including market reactions to operating results and changes in analyst coverage[133]. Operational Challenges - The company may face challenges in attracting and retaining key personnel, which is critical for executing its business strategy[94]. - The company may face challenges in expanding operations to meet demand, which could hinder growth and profitability[110]. - The company faces operational risks that may result from inadequate technology or external events, potentially leading to financial loss or reputational damage[130]. - The company may incur increased costs due to operating as a public company in the U.S.[36]. - The company is exposed to risks of liability due to potential fraudulent or illegal activities by employees and third parties, which could lead to significant financial penalties and reputational damage[95]. Market Conditions and Competition - The medical-use cannabis market's growth is uncertain, and demand projections may prove incorrect, affecting profitability[62]. - Competition in the medical-use cannabis industry is intensifying, with competitors having greater resources and experience[65]. - Economic conditions, including military conflicts and inflation, may adversely affect business operations, sales cycles, and market share[56]. - Political and military instability in Israel may adversely affect the company's results of operations and business prospects[158]. Strategic Partnerships and Expansion - The company plans to expand its international presence, but may face challenges related to import restrictions and production requirements in target markets[72]. - The company aims to expand its global distribution network through joint ventures and partnerships in the European Union and Canada, although no products have been distributed through these partnerships yet[193][194]. - The company has entered into long-term exclusive strategic partnerships with industry leaders such as Tilray, Organigram, Charlotte's Web, and Cookies to enhance its global footprint and access to raw materials[204]. - The company plans to establish distribution channels in fully-regulated markets, including Germany, the UK, and Switzerland, to meet anticipated demand for medical cannabis[215]. Production and Quality Control - The company operates a production facility in Southern Kibbutz with a gross area of 1.7 million square feet, currently producing 7 tons of cannabis annually, with potential to expand to 88 tons per year upon full operational capacity[191]. - The Northern Kibbutz facility has a gross area of 55,000 square feet, capable of producing up to 3 tons of cannabis annually, with an option to expand to 10 tons[192]. - The company has established rigorous cultivation and harvest protocols to ensure consistency, quality, and efficiency as it scales operations globally[206]. - The current product portfolio includes dried inflorescences and liquid oil, with a focus on well-defined cannabinoid profiles[220]. Intellectual Property and Innovation - The company has submitted trademark applications for its brand and logo in multiple jurisdictions, including Israel, Canada, the United States, and EU member states[144]. - The company has obtained protected breeding rights on five unique genetics in Israel and plans to apply for similar rights in other jurisdictions[145]. - The company relies on trade secret protection and confidentiality agreements to safeguard its proprietary technologies and products[146]. - The company may seek to file patent applications in Israel and other countries for its novel technologies, although this process is costly and time-consuming[147]. Leadership and Governance - The CEO, Alexander Rabinovich, holds over 26% of the company's voting power, with insiders collectively owning approximately 28% of the outstanding Ordinary Shares, leading to substantial control over corporate operations[179]. - The concentration of ownership among executives and major shareholders may limit the availability of Ordinary Shares to the public, potentially affecting trading prices[180]. - The company is classified as an emerging growth company and may rely on exemptions from certain disclosure requirements for up to five years or until total annual gross revenue exceeds $1.235 billion[118].

Financial Data and Key Metrics Changes - In 2022, the company achieved record revenues of approximately $150 million, representing a 77% increase compared to $85 million in 2021 [40][42] - Adjusted EBITDA for 2022 was $32 million, or 22% of revenue, compared to $22 million in 2021 [45][40] - Gross margin for 2022 was 41%, down from 44% in 2021, with a gross profit exceeding $60 million [18][40] Business Line Data and Key Metrics Changes - Patient count grew by only 18% in 2022, while the company’s revenue grew by 77%, indicating strong market share growth [5][40] - The company expanded its pharmacy chain to 28 locations, with 20 actively dispensing medical cannabis [42][39] - The company reported a record fourth quarter revenue of $41 million, a 30% increase from the fourth quarter of 2021 [43][40] Market Data and Key Metrics Changes - The Israeli Ministry of Health expects the cannabis market to grow to 85 tons in 2023, up from 49 tons in 2022, marking an expected growth of over 70% [13][37] - The company noted that the market is currently about 70% high-quality products and 30% discounted products, with a trend of struggling companies exiting the market [24][49] Company Strategy and Development Direction - The company aims to expand its international supply chain and has developed two new locations outside Israel, including a Cookies branded shop in Vienna and a pharmacy in London [7][6] - The focus remains on execution, expansion, and building a vertically integrated model centered on high-quality branded products [42][16] - The company plans to launch branded products in Germany and the UK, where prices are significantly higher than in Israel, potentially improving gross profit margins [26][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming prescription reform in Israel, which is expected to eliminate the bottleneck of physician prescribing licenses and significantly increase market access [61][59] - The company is prepared for the anticipated market growth and has scaled up operations and supply agreements with international partners [33][46] - Management acknowledged the current financial weakness in the industry but expects market consolidation and recovery as struggling companies exit [18][31] Other Important Information - The company ended 2022 with $95 million in cash and a solid balance sheet, demonstrating strong cash flow generation [46][40] - Capital expenditures in 2022 totaled $18 million, with expectations for 2023 to be at least 50% lower as the focus shifts to global expansion [20][21] Q&A Session Summary Question: Can you provide insights on the dynamics in the Israeli market? - Management indicated that the market is approximately 70% high-quality and 30% discounted products, with struggling companies affecting prices [24][49] Question: What are the expectations for international progress? - Management noted that while progress has been slow, they are taking careful steps and see Germany as a key target market [28][26] Question: How will the prescription reform impact market access? - The reform will allow any physician under the public health system to prescribe medical cannabis, expected to significantly increase market size [61][59] Question: What is the outlook for gross margins? - Management expects potential recovery in gross margins as the market cleans up and high-quality products are introduced in new territories [50][51] Question: How does the company plan to handle potential market growth? - The company has scaled up operations and signed agreements with third parties to prepare for increased demand [33][46]

InterCure Ltd (NASDAQ:INCR) Q2 2022 Earnings Conference Call August 16, 2022 8:30 AM ET Company Participants Adam Haliva - Communications Officer Alexander Rabinovitch - CEO & Director Amos Cohen - CFO Conference Call Participants Victor Ma - Cowen and Company Pablo Zuanic - Cantor Fitzgerald Yewon Kang - Canaccord Genuity Operator Good day, and thank you for standing by. Welcome to the InterCure Second Quarter 2022 Earnings Call and Webcast. [Operator Instructions]. I would now like to hand the conference ...