UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

For the month of October 2025

 

Commission File Number: 001-40614

 

INTERCURE LTD.

(Translation of registrant’s name into English)

 

85 Medinat ha-Yehudim Street

Herzliya, 4676670, Israel

Tel: +972 77 460 5012

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F ☒ Form 40-F ☐

 

 

 

 

 

 

This Report of Foreign Private Issuer on Form 6-K consists of InterCure Ltd.’s (the “Registrant”): (i) press release issued on October 8, 2025, titled “InterCure Reports First Half 2025 Results with NIS 130 Million in Revenue and Positive Operating Cash Flow,” which is attached hereto as Exhibit 99.1; (ii) Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2025, which is attached hereto as Exhibit 99.2; and (ii) Management’s Discussion and Analysis of Financial Condition and Results of Operations as of June 30, 2025, and for the Six Months then Ended, which is attached hereto as Exhibit 99.3.

  

Exhibit No.    
99.1   Press Release issued by InterCure Ltd. on October 8, 2025, titled “InterCure Reports First Half 2025 Results with NIS 130 Million in Revenue and Positive Operating Cash Flow.”
99.2   InterCure Ltd.’s Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2025.
99.3   InterCure Ltd.’s Management’s Discussion and Analysis of Financial Condition and Results of Operation as of June 30, 2025, and for the Six Months then Ended.
101   The following financial information from the Registrant’s Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2025, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Unaudited Interim Statements of Financial Position, (ii) Condensed Consolidated Unaudited Interim Statements of Profit or Loss and Other Comprehensive Income, (iii) Condensed Consolidated Unaudited Interim Statements of Changes in Equity; (iv) Condensed Consolidated Unaudited Interim Statements of Cash Flows, and (v) Notes to Condensed Consolidated Unaudited Interim Financial Statements.
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  INTERCURE LTD.
   
Date: October 8, 2025 /s/ Amos Cohen
  Amos Cohen
  Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

 

InterCure Reports First Half 2025 Results with NIS 130 Million in Revenue and Positive Operating Cash Flow

 

The Company reports NIS 130 million in revenue and NIS 12 million in positive operating cash flow, demonstrating resilience and sustained profitability with its eleventh consecutive half of positive Adjusted EBITDA amidst ongoing recovery in Israel

 

InterCure is encouraged by recent regulatory momentum in the U.S. and believes that it is well positioned to capitalize on evolving U.S. cannabis rescheduling, especially following its recent signing of an agreement to acquire ISHI

 

NEW YORK and HERZLIYA, Israel, October 8, 2025 – InterCure Ltd. (NASDAQ: INCR) (TASE: INCR) (“InterCure” or the “Company”), today announced its financial and operating results for the first half of 2025.

 

Alexander Rabinovitch, CEO of InterCure, stated: “In the first half of 2025, InterCure delivered revenues of NIS 130 million, achieving positive Adjusted EBITDA for the eleventh consecutive half year period and generating NIS 12 million in positive operating cash flow. This performance underscores the strength of our vertically integrated business model and our ability to navigate a challenging environment, including the impact of the October 7 attack and the ongoing war in Gaza. We continue to work closely with Israeli authorities to secure full compensation for damages to our southern facility.

 

Looking ahead, we are confident in our ability to continue our recovery growth trajectory, expanding our international footprint, and strengthen our leadership in the pharmaceutical cannabis industry, particularly with the strategic acquisition of ISHI, which positions us to capitalize on evolving opportunities in the global cannabis market. At the same time, we are closely monitoring regulatory developments in the U.S. regarding potential rescheduling of cannabis.”

 

First Half 2025 Financial Highlights

 

(All amounts are expressed in New Israeli Shekels (NIS), unless otherwise noted)

 

●Revenue of NIS 130 million, an increase of 15% compared to the second half of 2024, and an increase of 3% compared to NIS 126 million in the first half of 2024.

 

●Net loss of NIS 1.8 million, compared to near break-even in the first half of 2024.

 

●Adjusted EBITDA of NIS 12.6 million, representing 10% of revenue, marking the Company’s eleventh consecutive half of positive Adjusted EBITDA.1

 

●Positive cash flow from operations of NIS 12 million, compared to negative cash flow of NIS 43 million in the same period last year.

 

●Cash on hand of NIS 54 million as of June 30, 2025, compared to NIS 21 million as of June 30, 2024.2

 

●Shareholders’ equity of NIS 432 million as of June 30, 2025.

 

 

 

1 Adjusted EBITDA means net income (loss) before interest, taxes, depreciation and amortization adjusted for changes in the fair value of inventory, share-based payment expense, impairment losses (and gains) on financial assets, and other expenses (or income). Other income, net includes war-related damage compensation from the tax authorities, changes to allowance for credit risk and impairment of inventory.

2 Including restricted cash and deposits.

 

 
 

 

Operational and Strategic Highlights

 

●As the recovery process progresses, the Company resumed production, importation and sales from the Nir Oz facility, delivering first batches since the October 7, 2023 attack and the ongoing war in Gaza.

 

●Launched more than 40 new SKUs during the first half of 2025, marking the first major product launches since October 2023.

 

●Received NIS 81 million in compensation advances from Israeli authorities for war-related damages, as part of a total submitted damages3 of NIS 251 million.

 

●Continued expansion of Canndoc’s medical cannabis pharmacy chain and growing global demand for InterCure’s pharmaceutical-grade cannabis products.

 

●In September 2025, the Company entered into a share purchase agreement to acquire Botanico Ltd. (ISHI), a strategic acquisition expected to strengthen InterCure’s access to premium U.S. genetics, advanced cultivation technologies, and international market opportunities.

 

●The Company is closely monitoring regulatory developments in the U.S. regarding potential rescheduling of cannabis and believes that it is well positioned to capitalize on evolving U.S. cannabis landscape, especially following its recent signing of an agreement to acquire ISHI.

 

●Under the purchase agreement with respect to ISHI, the Company obtained exclusive supply of premium products under The Flowery™ and leading American brands, which are expected to contribute tens of millions of shekels to the Company’s revenues.

 

About InterCure (dba Canndoc)

 

InterCure (dba Canndoc) (NASDAQ: INCR) (TASE: INCR) is the leading, profitable, and fastest growing cannabis company outside of North America. 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. 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.

 

For more information, visit: https://www.intercure.co

 

 

 

3 The claim is not final and remains subject to adjustment. The total amount claimed may be increased as further information becomes available.

 

 
 

 

Non-IFRS Measures

 

This press release makes reference to certain non-IFRS financial measures. Adjusted EBITDA, as defined by InterCure, means 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, and other income, net which included war-related damage compensation from the tax authorities, changes to allowance for credit risk, and impairment of inventory. 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. InterCure’s method of calculating this measure may differ from methods used by other entities and accordingly, this measure may not be comparable to similarly titled measures used by other entities or in other jurisdictions. 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.

 

Forward-Looking Statements

 

This press release contains forward-looking statements. Forward-looking statements may include, but are not limited to, the Company’s expected growth, including in Adjusted EBITDA, success of its global expansion plans, its expansion strategy to major markets worldwide, expected receipt of additional compensation from the Israeli government, and the expected completion of the acquisition of ISHI, as well as statements, other than historical facts, that address activities, events or developments that InterCure intends, expects, projects, believes or anticipates will or may occur in the future. These statements are often characterized by terminology such as “believes,” “hopes,” “may,” “anticipates,” “should,” “intends,” “plans,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy” and similar expressions and are based on assumptions and assessments made in light of management’s experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Many factors could cause InterCure’s actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: the Company’s success in executing its global expansion plans (including the pending acquisition of Botanico Ltd. (ISHI)), its continued growth, expected operations and financial results, business strategy, competitive strengths, goals and expansion into major markets worldwide, the impact of the war in Israel and the war in Ukraine, and the conditions of the markets generally. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond InterCure’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: changes in general economic, business and political conditions, changes in applicable laws, the U.S. regulatory landscape and enforcement related to cannabis, changes in public opinion and perception of the cannabis industry, and reliance on the expertise and judgment of our senior management. More detailed information about the risks and uncertainties affecting us is contained under the heading “Risk Factors” included in the Company’s most recent Annual Report on Form 20-F, as well as in the Company’s Form 6-K containing the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and in other filings that we have made and may make with the Securities and Exchange Commission in the future.

 

Company Contact:

InterCure Ltd.

Amos Cohen, Chief Financial Officer

amos@intercure.co

 

Investor Relations Contact:

Arx Investor Relations

North American & Israeli Equities Desks

intercure@arxhq.com

 

 

 

 

Condensed Consolidated Interim Statements of Financial Position (Unaudited)

As of June 30, 2025

 

   As of June 30 
   NIS in thousands 
   2025   2024 
ASSETS          
           
CURRENT ASSETS:          
Cash and cash equivalents   51,334    19,899 
Restricted cash and deposits   2,436    948 
Trade receivables, net   46,931    61,672 
Other receivables   119,604    158,045 
Inventory   148,174    126,466 
Biological assets   5,269    3,388 
Financial assets measured at fair value through profit or loss   250    399 
Total current assets   373,998    370,817 
           
NON-CURRENT ASSETS:          
Other receivables   5,824    439 
Property, plant and equipment and right-of-use asset   105,046    98,611 
Goodwill   224,778    223,609 
Deferred tax assets   39,970    27,042 
Financial assets measured at fair value through profit or loss   2,147    1,922 
Investment in associate and loan    -    18,447 
Total non-current assets   377,765    370,070 
           
TOTAL ASSETS   751,763    740,887 
           
LIABILITIES AND EQUITY          
           
CURRENT LIABILITIES:          
Short term loan and current maturities   62,767    81,755 
Trade payables   90,785    83,071 
Other payables   44,454    39,965 
Contingent consideration   3,966    4,082 
Total current liabilities   201,972    208,873 
           
LONG-TERM LIABILITIES:          
Long term loans   94,917    51,317 
Liabilities in respect of employee benefits   973    841 
Lease liability   21,657    17,741 
Total long-term liabilities   117,547    69,899 
           
EQUITY:          
Share capital, premium and other reserves   675,393    649,013 
Capital reserve for transactions with controlling shareholder   2,388    2,388 
Receipts on account of shares   19,591    - 
Capital reserve for transactions with non-controlling interests   13,561    13,561 
Accumulated losses   (279,786)   (204,518)
Equity attributable to owners of the Company   431,147    460,444 
           
Non-controlling interests   1,097    1,671 
TOTAL EQUITY   432,244    462,115 
           
TOTAL LIABILITIES AND EQUITY   751,763    740,887 

 

 

 

 

Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income (Unaudited)

 

  

For the 6-months

ended on June 30

  

Year endd

December 31

 
   NIS in thousands 
   2025   2024   2024 
             
Revenue   130,011    125,733    238,845 
Cost of revenue before fair value adjustments   91,449    85,291    203,252 
                
Gross income before impact of changes in fair value   38,562    40,442    35,593 
                
Unrealized changes to fair value adjustments of biological assets   1,661    1,218    6,458 
Loss from fair value changes realized in the current year   2,005    1,029    11,818 
                
Gross Profit   38,218    40,631    30,233 
                
Research and development expenses   191    219    414 
General and administrative expenses   14,302    18,374    53,669 
Sales and marketing expenses   26,115    27,454    54,225 
Other expenses, net   (9,074)   (16,414)   (12,807)
Changes in the fair value of financial assets through profit or loss, net.   83    (201)   (341)
Share based payments   885    686    2,281 
                
Operating Profit   5,716    10,513    (67,208)
                
                
Financing income   2,356    1,031    2,747 
Financing expenses   10,369    10,070    22,862 
                
Financing expenses (income), net   8,013    9,039    20,115 
                
Profit before tax on income   (2,297)   1,474    (87,323)
                
Tax (expense) benefit   485    (1,480)   14,530 
Total comprehensive Profit (loss)   (1,812)   (6)   (72,793)
                
Profit (loss) attributable to:               
Owners of the Company   (1,704)   1,433    (67,795)
Non-controlling interests   (108)   (1,439)   (4,998)
Total   (1,812)   (6)   (72,793)
                
Earnings per share               
Basic earnings (loss)   (0.03)   0.03    (1.48)
Diluted earnings (loss)   (0.03)   0.03    (1.48)

 

Non-IFRS Financial Measures

 

Total comprehensive Profit (loss)   (1,812)   (6)   (72,793)
Interest / Financing expense (income) net   8,013    9,039    20,115 
Tax expenses (benefit)   (485)   1,480    (14,530)
Depreciation and amortization   8,451    6,337    15,371 
EBITDA   14,167    16,850    (51,837)
Share-based payment expenses   885    686    2,281 
Other income, net   (9,074)   (16,414)   (12,807)
War-related damage compensation from the tax authorities   9,019    16,830    42,468 
Changes to allowance for credit risk   (2,844)        16,878 
Impairment of inventory    -     -    15,960 
Changes in the fair value of financial assets through profit or loss, net   83    (201)   (341)
Fair value adjustment to inventory   344    (189)   5,360 
Adjusted EBITDA   12,580    17,562    17,962 

 

For More Financial Information:

 

For a comprehensive understanding of the Company’s financial reports and related management’s discussion and analysis for applicable periods, please review the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2024, and the Company’s Form 6-K containing the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, both available on the Company’s EDGAR profile at https://www.sec.gov/edgar

 

 

 

 

Exhibit 99.2

 

InterCure Ltd.

 

CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

As of June 30, 2025

 

 1 

 

 

InterCure Ltd.

 

CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

As of June 30, 2025

 

INDEX

 

    Page
     
Condensed Consolidated Unaudited Interim Statements of Financial Position   3-4
     
Condensed Consolidated Unaudited Interim Statements of Profit or Loss and Other Comprehensive Income     5
     
Condensed Consolidated Unaudited Interim Statements of Changes in Equity   6
     
Condensed Consolidated Unaudited Interim Statements of Cash Flows   7-8
     
Notes to Condensed Consolidated Unaudited Interim Financial Statements   9-17

 

 2 

 

 

InterCure Ltd.

Condensed Consolidated Unaudited Interim Statements of Financial Position

 

 

       June 30   December 31 
       2025   2024 
   Note   NIS in thousands 
Current assets               
Cash and cash equivalents        51,334    78,318 
Restricted cash and deposits        2,436    1,316 
Trade receivables, net        46,931    51,846 
Other receivables   7    119,604    134,660 
Inventory   4    148,174    120,305 
Biological assets   5    5,269    5,023 
Financial assets measured at fair value through profit or loss   6    250    333 
                
         373,998    391,801 
                
Non-current assets               
Other receivables   7    5,824    423 
Property, plant and equipment and right-of-use asset        105,046    105,244 
Goodwill        224,778    224,594 
Deferred tax assets        39,970    38,365 
Financial assets measured at fair value through profit or loss        2,147    2,147 
                
         377,765    370,773 
                
Total assets        751,763    762,574 

 

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

 

 3 

 

 

InterCure Ltd.

Condensed Consolidated Unaudited Interim Statements of Financial Position

 

 

       June 30   December 31 
       2025   2024 
             
Current liabilities               
Short term loan and current maturities        62,767    69,435 
Trade payables        90,785    77,540 
Other payables        44,454    41,809 
Contingent consideration        3,966    3,966 
Financial liability with respect to shares and warrants to be issued   3    -    34,000 
                
         201,972    226,750 
                
Non-current liabilities               
Long term loans        94,917    113,979 
Liabilities in respect of employee benefits        973    973 
Lease liability        21,657    23,201 
                
         117,547    138,153 
Total liabilities        319,519    364,903 
                
Equity               
Share capital, premium and other reserves        675,393    658,599 
Capital reserve for transactions with controlling shareholder        2,388    2,388 
Receipts on account of warrants        19,591    - 
Capital reserve for transactions with non-controlling interests        13,561    13,561 
Accumulated losses        (279,786)   (277,579)
                
Equity attributable to owners of the Company        431,147    396,969 
                
Non-controlling interests        1,097    702 
                
Total equity        432,244    397,671 
                
Total equity and liabilities        751,763    762,574 

 

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

 

 4 

 

 

InterCure Ltd.

Condensed Consolidated Unaudited Interim Statements of Profit or Loss and Other Comprehensive Income

 

 

   Six months ended
June 30,		   Year ended
December 31		 
   2025   2024   2024 
   NIS in thousands 
             
Revenue   130,011    125,733    238,845 
Cost of revenue before fair value adjustments   91,449    85,291    203,252 
                
Gross income before impact of changes in fair value   38,562    40,442    35,593 
                
Unrealized changes to fair value adjustments of biological assets   1,661    1,218    6,458 
Loss from fair value changes realized in the current year   2,005    1,029    11,818 
                
Gross Profit   38,218    40,631    30,233 
                
Research and development expenses   191    219    414 
General and administrative expenses   14,302    18,374    53,669 
Sales and marketing expenses   26,115    27,454    54,225 
Other income, net   (9,074)   (16,414)   (12,807)
Changes in the fair value of financial assets through profit or loss, net   83    (201)   (341)
Share based payments   885    686    2,281 
                
Operating Profit (loss)   5,716    10,513    (67,208)
                
Financing income   2,356    1,031    2,747 
Financing expenses   10,369    10,070    22,862 
                
Financing expenses, net   8,013    9,039    20,115 
                
Profit (loss) before taxes on income   (2,297)   1,474    (87,323)
                
Tax (expense) benefit   485    (1,480)   14,530 
Total comprehensive loss   (1,812)   (6)   (72,793)
                
Profit (loss) attributable to:               
To the Company’s shareholders   (1,704)   1,433    (67,795)
To non-controlling interests   (108)   (1,439)   (4,998)
Total   (1,812)   (6)   (72,793)
                
Earnings per share               
Basic earnings (loss)   (0.03)   0.03    (1.48)
Diluted earnings (loss)   (0.03)   0.03    (1.48)

 

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

 

 5 

 

 

InterCure Ltd.

Condensed Consolidated Unaudited Interim Statements of Changes in Equity

 

 

  

Share capital, premium

and other reserves

   Capital reserve for transactions with controlling shareholder   Receipts on account of warrants   Capital reserve for transactions with non-controlling interests   Accumulated losses   Equity attributable to owners of the Company   Non-controlling interests   Total equity 
   NIS in thousands 
                                 
As of January 1, 2025   658,599    2,388    -    13,561    (277,579)   396,969    702    397,671 
                                         
Loss for the period   -    -    -    -    (1,704)   (1,704)   (108)   (1,812)
Share-based payment   885    -    -    -    -    885    -    885 
Issuance of shares and warrants (see note 3B)   15,909    -    19,591    -    -    35,500    -    35,500 
Attribution of loss from noncontrolling interest   -    -    -    -    (503)   (503)   503    - 
                                         
As of June 30, 2025   675,393    2,388    19,591    13,561    (279,786)   431,147    1,097    432,244 
                                         
As of January 1, 2024   643,158    2,388    -    13,561    (203,995)   455,112    1,950    457,062 
                                         
Profit (loss) for the period   -    -    -    -    1,433    1,433    (1,439)   (6)
Share-based payment   686    -    -    -    -    686         686 
De-recognition of an obligation to issue shares   (1,020)   -    -    -    -    (1,020)   (796)   (1,816)
Attribution of loss from noncontrolling interest   -    -    -    -    (1,956)   (1,956)   1,956    - 
Issuance of ordinary shares related to business combinations   6,189    -    -    -    -    6,189    -    6,189 
                                         
As of June 30, 2024   649,013    2,388    -    13,561    (204,518)   460,444    1,671    462,115 

 

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

 

 6 

 

 

InterCure Ltd.

Condensed Consolidated Unaudited Interim Statements of Cash Flows

 

 

   Six months ended
June 30,		 
   2025   2024 
   NIS in thousands 
Cash flows from operating activities          
           
Loss for the period   (1,812)   (6)
Taxes paid   (1,160)   (10,698)
Adjustments required to present cash flows from operating activities (A)   15,170    (32,785)
           
Net cash provided by (used in) operating activities   12,198    (43,489)
           
Cash flows from investing activities          
           
Purchase of property, plant and equipment   (3,245)   (356)
Loans granted   -    (1,053)
Repayment of loans granted   150    4,000 
Acquisition of subsidiaries, net of cash acquired   (114)   (551)
(Increase) decrease in restricted cash, net   (1,118)   9,000 
Net cash provided by (used in) investing activities   (4,327)   11,040 
           
Cash flows from financing activities          
           
Lease payments   (2,634)   (2,312)
Receipt of loans from banks   5,000    22,155 
Repayment of loans from banks   (30,202)   (60,442)
Issuance of shares and warrants   1,500    - 
Interest paid   (8,512)   (8,191)
Net cash provided by (used in) financing activities   (34,848)   (48,790)
           
Decrease in cash and cash equivalents   (26,977)   (81,239)
Exchange differences in respect of balances of cash and cash equivalents   (7)   (2)
Balance of cash and cash equivalents at beginning of period   78,318    101,139 
           
Balance of cash and cash equivalents at end of period   51,334    19,898 

 

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

 

 7 

 

 

InterCure Ltd.

Condensed Consolidated Unaudited Interim Statements of Cash Flows

 

 

   Six months ended
June 30,		 
   2025   2024 
   NIS in thousands 
A) Adjustments required to present cash flows from operating activities          
           
Adjustments to items in the consolidated statement of Profit or loss and Other comprehensive income:          
Depreciation   8,451    6,337 
Share-based payment   885    686 
Changes in the fair value of financial assets through profit or loss, net   83    (212)
Finance expenses, net   8,013    9,039 
Gain in respect of acquisition of a subsidiary   -    (345)
Tax expense (benefit)   (485)   1,480 
    16,947    16,985 
           
Changes in assets and liabilities items:          
           
Decrease (increase) in trade receivables   4,944    (230)
Decrease (increase) in other receivables   5,248    (21,801)
Increase in inventory   (27,869)   (19,064)
Increase in biological assets   (246)   (2,566)
Increase (decrease) in trade payables   13,191    (4,208)
Increase (decrease) in other payables   2,955    (1,901)
           
    (1,777)   (49,770)
           
    15,170    (32,785)
           
B) Material non-cash activities          
Additions to right-of-use assets   581    2,976 
Purchase of property, plant and equipment   4,342    5,970 
Issuance of shares and warrants   34,000    - 

 

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

 

 8 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 1 -General

 

A.The Company’s activity

 

InterCure Ltd. (hereinafter: the “Company”) is a public company which is listed on the Tel Aviv Stock Exchange (hereinafter: the “TASE”) and the Nasdaq Global Market, domiciled in Israel. Its offices are located in Herzliya, Israel. The Company is engaged in the medical cannabis sector mainly through its holdings of the entirely issued and paid-up capital of Canndoc Ltd. (hereinafter: “Canndoc”), Pharmazone Ltd. (hereinafter: “Pharmazone”) and Cannolam Ltd. The Company also has additional holdings in the biomed sector.

 

Canndoc:

 

The Company holds 100% of Canndoc’s issued and paid-in capital.

 

The Company, through Canndoc, is engaged in research, marketing, cultivation, production and distribution of medical cannabis products in Israel and around the world.

 

Cannolam:

 

The Company holds 100% of the shares of Cannolam Ltd., an Israeli private company, which holds, independently and/or through its owned subsidiaries, the exclusive rights to the production, importing, distribution and use of leading international cannabis and lifestyle trademarks in the territory of the state of Israel. Inter alia, Cannolam Ltd. has exclusive rights in respect of the brands Cookies, Mr. Nice and Oxon Pharma.

 

Pharmazone:

 

The Company holds 100% of the shares of Pharmazone, an Israeli private company, which operates a pharmaceutical and medical cannabis trading house.

 

Other Holdings:

 

During 2022 and 2024, the Company engaged in a series of agreements for the acquisition or opening of 6 and 6 pharmacies ,respectively.

 

During the six months ended June 30, 2025, the Company entered into agreements for the acquisition of a trading house and a company that is mainly engaged in research and development of cannabis-based medical products.

 

Investments in the biomed sector:

 

The Company holds shares of two companies in the biomed sector: F.O.R.E Biotherapeutics Ltd. (formerly known as NovellusDX Ltd., hereinafter: “Fore”), and XTL Biopharmaceuticals Ltd. (hereinafter: “XTL”).

 

 9 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

B.Definitions:

 

In these consolidated financial statements:

 

Company - InterCure Ltd.
Group - The Company and its subsidiaries.
Related Parties - As defined in IAS 24.
USD - U.S. dollars.
NIS - New Israeli shekel.
Subsidiaries - Companies which are controlled by the Company (as defined in IFRS 10), directly or indirectly, and whose financial statements are fully consolidated with the Company’s reports.
Investee companies      - Subsidiaries and companies, including a partnership or joint venture, the Company’s investment in which is stated, directly or indirectly, on the equity basis.
Controlling shareholder - As defined under the Israeli Companies Law.

 

Note 2 -Material Accounting Policies

 

Basis of Preparation of the Financial Statements

 

These interim financial statements for the six months ended June 30, 2025, have been prepared in accordance with IAS 34, Interim Financial Report and should be read in conjunction with the Company’s last annual consolidated financial statements as at and for the year ended December 31, 2024. (the “last annual consolidated financial statements”). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Accounting Standards.

 

However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements.

 

These interim financial statements were approved by the Company’s board of directors on September 17 ,2025.

 

Use of judgements and estimates

 

In preparing these interim financial statements, management has made judgements and estimates about the future, that affect the application of the Company’s accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

 

The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.

 

 10 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 2 -Material Accounting Policies (Cont.)

 

Measurement of fair values

 

All assets and liabilities which are measured at fair value, or whose fair value was disclosed, are divided into categories in the fair value hierarchy, based on the lowest level of inputs which is significant to the measurement of fair value in its entirety:

 

  Level 1:Quoted prices (without adjustments) in an active market of identical assets and liabilities .
    
  Level 2:Inputs which are not quoted prices which are included in level 1, which are directly or indirectly observable.
    
  Level 3:Inputs which are not based on observable market data, as described in Note 5 – Biological Assets, and Note 6 – Investments in financial assets measured at fair value through profit or loss (investments in companies in the biomed sector).

 

Note 3 -Transactions and Events During the Reporting Period

 

A.Following the brutal attacks on Israel, the mobilization of army reserves and the Government declaring a state of war (“Iron Swords” war) in October 2023, there was a decrease in Israel’s economic and business activity. The security situation has led, inter alia, to a disruption in the chain of supply and production, a decrease in the volume of national transportation, a shortage in manpower as well as a decrease in the value of financial assets and a rise in the exchange rate of foreign currencies in relation to the New Israeli Shekel.

 

Since the beginning of the war, the Southern facility has been damaged, including its inventory, property, plant and equipment and biological assets. In addition, until the first half of 2024, the southern facility had been designated by the Israeli authorities as a closed military area and there was limited access to the site. The Company began the process of restoring the Southern facility in 2024 and returned to production in July 2024.

 

The Company is working diligently with the Israeli tax authorities to obtain full compensation for the damages caused to the Company. As of June 30, 2025, the Company submitted applications to the Israeli tax authorities to receive compensation in the aggregate amount of NIS 251 million.

 

As of the date of approval of these financial statements the Company has received advances in the aggregate amount of NIS 81.5 million.

 

The Company recorded the compensation that, based on management and its advisors’ estimate, the Company has reasonable assurance to receive from the Israeli tax authorities, as other income.

 

The Company believes that it will be entitled to compensation from the Israeli tax authorities for all direct and indirect damages suffered, including loss of profits.

 

 11 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 3 -Transactions and Events During the Reporting Period (Cont.)

 

B.On December 31, 2024, the Company’s board of directors approved the allocation of Company shares, in a private allocation of shares and options, to nine investors and one investor, the controlling shareholder of the Company or a company under its control, who agreed to invest a total of approximately NIS 34 million in the Company. The allocation was approved at the general meeting of shareholders on February 3, 2025.

 

In February 2025, an additional investor invested NIS 1.5 million.

 

Following the approval of the general meeting, and all other required approvals, on March 3, 2025, the Company issued 7,349,896 shares and 7,349,896 warrants, and the amount was recorded in equity.

 

C.In May 2025, the Company engaged in an agreement to purchase 100% of Kanabo Research Ltd, a company that is mainly engaged in research and development of cannabis-based medical products.

 

D.On April 18, 2024, the Company engaged in an agreement to purchase 50% of “New day Distribution” trading house, and the completion date was in January 2025 subsequent to which the Company holds 100% of “New day Distribution” trading house.

 

Note 4 -Inventory:

 

Inventory is comprised of finished goods of dry packaged or rolled medical cannabis and cannabis oil, as well as the outputs of processing procedures, which include, inter alia, agricultural produce which has been transferred from biological assets, where the procedure of processing into finished goods has not yet been completed.

 

   June 30,   December 31, 
   2025   2024 
   NIS in thousands 
Finished goods   60,887    62,706 
Goods in process and dried inflorescence   87,287    57,599 
Total inventory   148,174    120,305 

 

 12 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 5 -Biological Assets:

 

The Company measured biological assets (level 3), which are mostly comprised of medical cannabis plants and agricultural produce, at fair value less selling costs up to the point of harvest. This value serves as the cost basis of inventory after the harvest.

 

The Company’s biological assets are primarily comprised of medical cannabis seedlings and medical cannabis. Presented below are the changes in biological assets during the reporting period:

 

   June 30,   December 31, 
   2025   2024 
   NIS in thousands 
Balance as of January 1   5,023    822 
Costs of growing medical cannabis plants   13,458    26,081 
Change in fair value less selling costs   1,661    1,581 
Transfer to inventory   (14,873)   (23,461)
Balance as of the end of the period   5,269    5,023 

 

Disclosure regarding assumptions which were used to estimate the net fair value of biological assets

 

A.Below are the main assumptions used:
   June 30   December 31 
   2025   2024 
Net growing area (in thousands of square meters)   10.5    10.5 
Estimated net yield as of the reporting date (tons) (1)   1.3    1.8 
Estimated net selling price (NIS per gram) (2)   16.8    16.8 
Estimated growing cycle length (in weeks) (3)   13    13 
Estimated growing cycle completion rate (in percent) (4)   35%   23%
Proportion of plants which do not reach the harvesting stage (5)   3%   3%

 

(1)According to the number of seedlings as of the end of the reporting period
(2)According to the price range of the Company’s existing products as of the end of the reporting period
(3)In accordance with the Company’s experience, and according to the strains which exist as of the reporting date
(4)By planting date vs. growing cycle length
(5)According to the final product net weight

 

B.Below is a sensitivity analysis on the fair value of the biological assets (in NIS thousands) in respect of a 10% increase in each of the following variables:

 

   June 30   December 31 
   2025   2024 
   NIS in thousands 
Average selling price   643    612 
Proportion of oil products   2    16 
Proportion of plants which do not reach harvesting   52    52 

 

 13 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 6 -Investments in Financial Assets Measured at Fair Value Through Profit or Loss:

 

The Company has investments in investees measured at fair value through profit or loss.

 

The fair value of the investments in these investees as of June 30, 2025, amounted to a total of NIS 2,397 thousand, in accordance with a quoted marked price (level 1) or valuation which was received from an external valuator (level 3).

 

Disclosure of fair value

 

The following table presents the Company’s financial assets and financial liabilities which are measured at fair value as of June 30, 2025:

 

   Level 1   Level 2   Level 3   Total 
   NIS in thousands 
Assets:                
Financial assets measured at fair value through profit or loss:                    
Investments in investees   93    -    2,147    2,240 
Investment in XTL stock   157    -    -    157 
Total assets   250    -    2,147    2,397 

 

The following table presents the Company’s financial assets and financial liabilities which are measured at fair value as of December 31, 2024:

 

   Level 1   Level 2   Level 3   Total 
   NIS in thousands 
Assets:                
Financial assets measured at fair value through profit or loss:                    
Investments in investees   83    -    2,147    2,230 
Investment in XTL stock   250    -    -    250 
Total assets   333    -    2,147    2,480 

 

 14 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 7 -Other receivables:

 

As of June 30, 2025, the balance is comprised of debts and loans in the amount of NIS 44,327 thousand, provided to non-related parties as part of mergers and acquisitions processes which did not materialize and were not completed, net of respective provision for impairment.

 

Balance of non-related parties before provision for impairment   68,423 
Provision for impairment   (24,096)
Balance of non-related parties after provision for impairment   44,327 

 

Note 8 -Operating segment data:

 

Reconciliation of operating segment data include addition of assets and liabilities which were not attributed to segments.

 

   NIS in thousands 
   Cannabis segment   Biomed segment   Reconciliations   Total 
                 
Period ended June 30, 2025                    
External revenue   130,011    -    -    130,011 
Segment profit (loss)   8,953    (83)   -    8,870 
                     
General and administrative expenses not attributable to segments                  (3,209)
Other expenses, net                  55 
Operating profit                  5,716 
                     
Segment assets   721,367    2,304    28,092    751,763 
Segment liabilities   310,796    -    8,724    319,520 

 

   NIS in thousands 
   Cannabis segment   Biomed segment   Reconciliations   Total 
                 
Period ended June 30, 2024                    
External revenue   125,733    -    -    125,733 
Segment profit (loss)   14,682    201    -    14,883 
                     
General and administrative expenses not attributable to segments                  (20,784)
Other expenses, net                  16,414 
Operating profit                  10,513 
                     
Segment assets   709,587    2,256    29,044    740,887 
Segment liabilities   273,026    -    5,746    278,772 

 

 15 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 8 -Operating segment data: (Cont.)

 

   NIS in thousands 
   Cannabis segment   Biomed segment   Reconciliations   Total 
                 
Year ended December 31, 2024                    
External revenue   238,845    -    -    238,845 
Segment profit (loss)   (39,697)   341    -    (39,356)
                     
General and administrative expenses not attributable to segments                  (40,659)
Other expenses, net                  12,807 
Operating Loss                  (67,208)
                     
Segment assets   732,084    2,397    28,093    762,574 
Segment liabilities   418,966    -    (54,063)   364,903 

 

Note 9 -Contingent liabilities:

 

  1. Further to Note 16B(2) to the Company’s 2024 annual financial statements, with respect to the agreement with Cann Pharmaceutical Ltd., on July 1, 2025, the parties submitted a joint motion for approval of a procedural arrangement. On July 6, 2025, the Tel Aviv District Court unexpectedly declined to approve the arrangement and ordered the strikeout of the claim and counterclaim, citing delays in the proceedings. On July 17, 2025, the parties filed a joint notice opposing the strikeout and clarifying that the delays were due to the war in Israel and reserve military service of Company representatives and legal counsel. The court did not accept the parties’ joint request and, on the same date, ordered the strikeout of the proceedings, which became effective on July 21, 2025. The strikeout was purely procedural and unrelated to the merits of the case. The Company is currently evaluating its next steps in this matter.

 

2.On May 15, 2025, a claim was filed by “Brit Shevet Avraham” against the Company and Canndoc. The lawsuit seeks, among other things, court orders instructing the defendants to remove alleged unlawful publications regarding medical cannabis, to refrain from engaging in any commercial advertising of medical cannabis, and to cease indirect advertising of medical cannabis through collaborations with pharmacies. On September 11, 2025, the defendants filed a motion to dismiss the claim on threshold grounds including lack of legal personality and standing, that the claimant purports to act as a “public plaintiff”, and that the action constitutes an indirect attempt to challenge the Ministry of Health’s regulatory policy, following prior proceedings that failed. In parallel, the defendants also filed a motion for an extension of time to submit their statement of defense.

 

At this early and preliminary stage of the case, it is not possible to estimate the claim’s chances.

 

 16 

 

 

InterCure Ltd.

Notes to Condensed Consolidated Unaudited Interim Financial Statements

 

 

Note 10 -Subsequent events:

 

1.On September 17, 2025, the Company entered into a share purchase agreement to acquire 100% of Botanico Ltd. (“Botanico”), a company that has exclusive rights to distribute The Flowery’s acclaimed U.S. cannabis brands and genetics in Israel and across international markets.

 

The acquisition will be executed in two stages: in the first stage, the Company will acquire 50% of Botanico’s share capital in consideration for 2,261,345 of the Company’s ordinary shares and 205,710 options. Pursuant to the share purchase agreement, within two years, the Company will complete the acquisition of the remaining 50% of Botanico’s share capital in consideration for an additional 2,252,317 of the Company’s ordinary shares and 204,889 options.

 

2.On July 8, 2025, the Company’s board of directors approved the allocation of 168,727 shares to the Company’s employees. On August 27, 2025, the TASE approved the listing of such shares.

 

- - - - - - - - - - - -

 

 17 

 

 

Exhibit 99.3

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

 

As of June 30, 2025, and for the Six Months then Ended

 

Cautionary Note Regarding Forward-Looking Statements

 

Certain information included herein may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended, and other federal securities laws.

 

These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, the timing of our pending acquisition, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.

 

The use of the words “anticipate”, “believe”, “budget”, “continue”, “could”, “estimate”, “expect”, “forecasts”, “intends”, “may”, “might”, “outlook”, “plan”, “possible”, “potential”, “predict”, “project”, “scheduled”, “should”, “target”, “would”, and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not a forward-looking statement.

 

These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated or implied in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include but are not limited to: 

 

●our ability to obtain, and the timing of, regulatory approvals to produce, manufacture, distribute, export and import pharmaceutical-grade cannabis and cannabis-based products;

 

●our partners’ ability to obtain, and the timing of, regulatory approvals to produce, manufacture, distribute, export and import pharmaceutical-grade cannabis and cannabis-based products;

 

●the development and regulation of cannabis and, more specifically, the medical-use cannabis industry;

 

●the outcomes of preclinical studies, clinical trials and other research regarding the safety and efficacy of cannabis and the ability of such trials to increase acceptance of cannabis in the medical community;

 

●the commercialization and pricing of our products;

 

●our competitors’ development, marketing and sale of products that compete with our products;

 

●our expectations regarding future growth, including our ability to complete the expansion of our facilities in northern Israel, southern Israel, the European Union and Canada, as well as the overall expansion of the Cannolam pharmacy chain in 2025 and onwards;

 

●our estimates regarding the growth of the Israeli medical cannabis market (including the number of patients);

 

●our ability to enter into arrangements with distributors, including any required regulatory approvals;

 

●our ability to maintain an active trading market for our ordinary shares, no par value (the “ordinary shares”), and whether the market price of our ordinary shares is volatile;

 

●our ability to execute our growth strategies;

 

 

 

 

●our competitive position within the industry;

 

●expectations for regulatory and competitive factors related to the cannabis industry generally, including the permanent export permit from the Israeli Medical Cannabis Agency and other Israeli authorities, as well as the ability to obtain import permits into Israel for future cannabis shipments;

 

●the continued listing of the ordinary shares;

 

●the conflict in the Middle East, and specifically the on-going armed conflict between Israel and the Gaza Strip, Iran and Hezbollah in Lebanon;

 

●our expectations regarding our ability to complete the recovery from war damage and rehabilitation of our facility in southern Israel;

 

●our expectations regarding our revenue, expenses and operations;

 

●expectations regarding future director and executive compensation levels and plans;

 

●the time and attention each executive officer and director will devote to our business;

 

●expected industry trends;

 

●general economic trends;

 

●our ability to meet the conditions to complete the acquisition of ISHI (as defined below);

 

●fluctuations in foreign exchange rates; and

 

●fluctuations in interest rates.

 

The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements. For a more detailed description of the risks and uncertainties affecting our company, reference is made to our Annual Report on Form 20-F for the year ended December 31, 2024, or our Annual Report, which was filed with the Securities and Exchange Commission, or the SEC, on May 1, 2025, and the other risk factors discussed from time to time by our company in reports filed or furnished to the SEC.

 

Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Report on Form 6-K, and particularly our forward-looking statements, by these cautionary statements.

 

Operating Results

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in our Annual Report, as well as our condensed consolidated unaudited financial statements and the related notes thereto for the six months ended June 30, 2025, included elsewhere in this Report on Form 6-K, which have been prepared in accordance with IFRS Accounting Standards. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties.

 

 

 

 

Amounts are presented in thousands of NIS.

 

Overview

 

We are an Israeli public corporation with shares listed for trading on the Tel Aviv Stock Exchange, or TASE, under the symbol “INCR”, and on the Nasdaq under the symbol “INCR”.

 

The Company has 15 direct subsidiaries, 14 as described in its Annual Report under “Item 4.B. Business Overview” and one additional as described in Note 3(C) to our condensed consolidated unaudited financial statements and the related notes thereto for the six months ended June 30, 2025, included elsewhere in this Report Form 6-K.

 

We (more specifically through our subsidiary, Canndoc Ltd.) are a pioneer in the production (including the breeding, cultivating and processing), manufacturing and distribution of pharmaceutical-grade cannabis and cannabis-based products for medical use. For more than 17 years, we have been a leader in the licensed production and distribution of cannabis and cannabis-based products throughout Israel, one of the first countries with a governmentally-sanctioned regime for the production, manufacturing and distribution of cannabis for medical use.

 

Our goal is to be a global leader in the production and distribution of high-quality pharmaceutical-grade cannabis-based branded products to patients in all territories that permit and regulate the distribution of pharmaceutical-grade cannabis, including Israel, the European Union and Australia.

 

Since the beginning of 2020, we have focused on accelerating and growing our commercial activity in major markets around the world. As part of our global vertically integrated “seed-to-sell” model, we have entered into exclusive collaborations with some of the largest international cannabis companies in the world including Tilray, Organigram, Charlotte’s Web and Cookies. These strategic agreements serve to advance our capabilities and emphasize our focus on delivering premium quality and branding to Israel and other target markets. We have expanded cooperation agreements for the production, marketing and distribution of our products in countries with supportive regulations.

 

We believe in the uncompromising quality of our products, and we are leading the trend towards the pharmaceutical standard in the medical cannabis industry, both through a high quality, advanced production system and through extensive research and development with nine clinical studies. We have acquired a unique knowledge throughout our 17 years of experience operating in the cultivation, growth and genetics of cannabis strains. In addition, we have invested in a production system that adheres to the strictest regulatory and quality standards. In doing so, we achieve the highest standard of product quality for our patients and for commercial research collaborations. We believe this will enable us to enter into future target markets and strategic partnerships, expanding our leadership globally.

 

Non-IFRS Financial Measures

 

We use certain non-IFRS financial measures to measure, compare and explain our operating results and financial performance. These measures are commonly used by companies operating in the cannabis industry as useful metrics for measuring performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS. The Company defines such financial measures as follows:

 

“Adjusted EBITDA” means EBITDA for the cannabis sector adjusted for changes in the fair value of inventory, share-based payment expense, impairment losses (and gains) on financial assets, and other expenses (or income);

 

 

 

 

“EBITDA” means net income (loss) before interest, taxes, depreciation and amortization.

 

We present Adjusted EBITDA and EBITDA in this Report on Form 6-K because these are measures that our management and board of directors utilize as a measure to evaluate our operating performance. Accordingly, we believe that Adjusted EBITDA and EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

 

These measures should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. For a reconciliation of net income (loss) from continuing operations to EBITDA and Adjusted EBITDA, please see “- Results of Operations - Comparison of the Six Months Ended June 30, 2025 and 2024.”

 

First Half 2025 Key Financial & Operating Highlights

 

For The Company (on a consolidated basis):

 

●Our consolidated net loss for the six months ended June 30, 2025 was NIS 2 million, compared to a consolidated net loss of NIS 0.006 million for the six months ended June 30, 2024. The net loss includes non-cash amounts such as allowance for credit risk.

 

●First half 2025 revenue and Adjusted EBITDA of NIS 130 million and NIS 13 million, respectively.

 

●Positive cash from operations of NIS 12 million for the six months ended June 30, 2025 compared to negative cash from operations of 43 million for the six months ended June 30, 2024.

 

●According to Israeli Law, due to the location of our production facility in southern Israel (the “Southern Facility”), we are entitled to receive from Israeli authorities full compensation for all the direct and indirect damages caused to the Southern Facility by the terrorist attack and the war in Gaza. Our management and our advisers are working diligently with the Israeli authorities to obtain this full compensation. To date, we have already received NIS 81 million as advance payments from the Israeli authorities in relation to such compensation as part of a total submitted damages1 of NIS 251 million.

 

●Cash and cash equivalents and restricted cash of NIS 54 million as of June 30, 2025 compared to NIS 21 million as of June 30, 2024.

 

 

1 The claim is not final and remains subject to adjustment. The total amount claimed may be increased as further information becomes available.

 

 

 

 

Results of Operations

 

Comparison of the Six Months Ended June 30, 2025 and 2024

 

The following table summarizes our unaudited results of operations for the six months ended June 30, 2025 and 2024:

 

  

Six Months Ended

June 30,

 
   2025   2024 
Revenue   130,011    125,733 
Gross income before impact of changes in fair value   38,562    40,442 
Gross profit   38,218    40,631 
Research and development expenses   191    219 
General and administrative expenses   14,302    18,374 
Sales and marketing expenses   26,115    27,454 
Changes in the fair value of financial assets through profit or loss, net   83    (201)
Share-based payments   885    686 
Other income, net   (9,074)   (16,414)
Consolidated operating profit   5,716    10,513 
Total comprehensive loss   (1,812)   (6)
Basic earnings (loss) per share   (0.03)   0.03 
Diluted earnings (loss) per share   (0.03)   0.03 
           
Total comprehensive loss   (1,812)   (6)
Interest / Financing cost   8,013    9,039 
Tax expenses (benefit)   (485)   1,480 
Depreciation and amortization   8,451    6,337 
EBITDA   14,167    16,850 
Share-based payments   885    686 
Other income, net    (9,074)   (16,414)
War-related damage compensation from the tax authorities   

9,019

    

16,830

 

Changes to allowance for credit risk

   

(2,844

)   

-

 
Changes in the fair value of financial assets through profit or loss, net   83    (201)
Fair value adjustment to inventory   344    (189)
Adjusted EBITDA   12,580    17,562 

 

Revenues - Revenue increased by 3% to NIS 130 million for the six months ended June 30, 2025, compared to NIS 126 million for the six months ended June 30, 2024, primarily due to sales of the first batches from Nir-Oz since the war began.

 

Gross profit before effect of fair value - The gross profit decreased by 5% to NIS 39 million for the six months ended June 30, 2025, compared to NIS 40 million for the six months ended June 30, 2024, mainly due to sales of the first batches from Nir-Oz since the war began.

 

Consolidated net Profit (Loss) - Our consolidated net loss decreased to NIS 2 million for the six months ended June 30, 2025, compared to NIS 0.006 million for the six months ended June 30, 2024. The net loss of includes non-cash amounts such as allowance for credit risk and decreased mainly due to sales of the first batches from Nir-Oz since the war began.

 

Adjusted EBITDA - For the six months ended June 30, 2025, we had positive EBITDA of NIS 13 million, which was 10% of revenues, as compared to positive EBITDA of NIS 18 million for the six months ended June 30, 2024, which was 14% of revenues.

 

General and administrative expenses - General and administrative expenses decreased by 22% to NIS 14 million for the six months ended June 30, 2025, compared to NIS 18 million for the six months ended June 30, 2024, primarily due to an allowance for credit risk in 2024.

 

Selling and marketing expenses - Selling and marketing expenses decreased by 5% to NIS 26 million for the six months ended June 30, 2025, compared to NIS 27 million for the six months ended June 30, 2024, primarily due to a decrease in distribution costs.

 

 

 

  

Liquidity and Capital Resources

 

Cash Flow

 

The Company’s approach to liquidity is to always have sufficient liquidity to meet its liabilities as they come due. This is achieved by continuously monitoring cash flows and reviewing actual operating expenditures and revenue against budget.

 

   For the Six Months Ended
June 30,		 
Cash Flow  2025   2024 
Net cash provided by (used in) operating activities   12,198    (43,489)
Net cash used in financing activities   (34,848)   (48,790)
Net cash provided by (used in) investing activities   (4,327)   11,040 
Change in cash during the period   (26,977)   (81,239)
Exchange differences in respect of cash and cash equivalent balances   (7)   (2)
Cash and cash equivalents, beginning of year   78,318    101,139 
Cash and cash equivalents, end of year   51,334    19,898 

 

Net cash flow provided by operating activities - The increase to NIS 12 million in net cash provided by operating activities for the six months ended June 30, 2025, compared to NIS 43 million in net cash used in operating activities, for the six months ended June 30, 2024 was due to sales of the first batches from Nir-Oz since the war began that completed most of the production processes in 2024.

 

Net cash used in financing activities - The decrease in net cash used in financing activities by 29% to NIS 35 million for the six months ended June 30, 2025, compared to NIS 49 million for the six months ended June 30, 2024 was primarily due to a greater repayment of loans from banks in 2024.

 

Net cash used in investing activities - The decrease by 139% to NIS 4 million in net cash used in investing activities for the six months ended June 30, 2025, compared to NIS 11 million in net cash provided by investing activities for the six months ended June 30, 2024 was primarily due to a repayment of a deposit in 2024.

 

Proposed Transactions

 

We seek potential acquisition targets on an ongoing basis and may complete several acquisitions in any given fiscal year.

 

Recent Developments

 

Below are recent developments related to our liquidity and capital resources for the six months ended June 30, 2025 and up to the date of this Report on Form 6-K:

 

●In December 2024, we entered into financing commitments of NIS 66 million which may increase to NIS 107 million, which included a binding commitment from a leading Israeli bank to provide us with a non-secured loan of NIS 30 million for a period of up to 24 months, to be repaid until December 23, 2026, on customary terms and conditions, including an interest rate of the one year loan prime rate (6.00%), or the Loan.

 

●Under a securities purchase agreement dated March 2, 2025 (the “Private Placement”), we issued in a private placement, or the Private Placement, to investors (i) an aggregate of 7,349,896 ordinary shares of the Company, at a purchase price of NIS 4.83 (approximately $1.34) per ordinary share, at a premium above the opening price of the Company’s ordinary shares on the Tel Aviv Stock Exchange on the morning of Monday, December 16, 2024, which was NIS 4.81 per share, or the Determining Date, and (ii) warrants, or the Warrants, that have a term of four years, to purchase up to an additional 7,349,896 of our ordinary shares at an exercise price equal to NIS 5.70 (approximately $1.58), at an 18% premium above the opening price of our ordinary shares on the Determining Date, which may further increase the proceeds from the Private Placement up to a total of approximately NIS 77 million (approximately $21.5 million) if the Warrants are fully exercised for cash. The Private Placement was subject to certain closing conditions, which included the approval of our shareholders, which was later obtained in February 2025. The Private Placement closed on March 3, 2025.

 

 

 

 

●On February 12, 2025, we announced that Mr. Ehud Barak will step down as Chairman of the Board, effective February 13, 2025, and will be succeeded by Mr. Alexander Rabinovich who has successfully led the Company as Chief Executive Officer for the past five years.

 

●On September 17, 2025, we entered into a share purchase agreement with Botanico Ltd., also known as ISHI, or ISHI, an Israeli premium cannabis technology and brand company that delivers immediate access to exclusive premium indoor products supply, advanced cultivation technologies and established partnerships with leading American cannabis operators. Pursuant to the terms of the share purchase agreement, we will acquire 100% of ISHI in two phases: 50% of ISHI’s issued and outstanding share capital on a fully diluted basis will be acquired at the initial closing in consideration for 2,261,345 ordinary shares of the Company, and 205,710 options to purchase ordinary of the Company, or the Options, to the securities holders of ISHI, in a private placement offering, and the remaining 50% will be acquired upon the earlier of (i) ISHI achieving three consecutive months of positive operating profitability or (ii) 24 months from the initial closing, in consideration for an additional 2,252,317 ordinary shares and 204,889 Options.

 

The total consideration for the acquisition is 4,513,663 ordinary shares and 410,599 Options representing, in the aggregate, approximately 10% of our outstanding shares on a fully diluted basis as of immediately prior to the initial closing. The parties expect the initial closing to occur in the first quarter of 2026, subject to regulatory approvals from Israeli Medical Cannabis Agency, Israel Securities Authority, and the TASE. 

 

Research and development, patents and licenses, etc.

 

A comprehensive discussion of our research and development, patents and licenses, etc., is included in “Item 4.B. Business Overview - Research and Development” and “Item 4.B. Business Overview - Intellectual Property” in our Annual Report.

 

Trend Information

 

We are in a development stage with regard to different products. It is not possible for us to predict with any degree of accuracy the outcome of our research, development, or commercialization efforts. As such, it is not possible for us to predict with any degree of accuracy any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information to not necessarily be indicative of future operating results or financial condition.

 

Critical Accounting Estimates

 

The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s critical accounting estimates are summarized in Note 3 of our audited consolidated financial statements which is referenced in “Item 5. Operating and Financial Review and Prospects – Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report.

 

Off-Balance Sheet Transactions

 

The Company has no off-balance sheet arrangements.