EX-99.4 5 ex99-4.htm

Exhibit 99.4

Intercure Ltd.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As Of September 30, 2021

(Unaudited)

NOTICE OF NO AUDITOR REVIEW OF CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

Section 4.3(3)(a) of National Instrument 51-102, Continuous Disclosure Obligations, provides that if an auditor has not performed a review of the consolidated interim financial statements, the interim consolidated financial statements must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The Company’s external auditors, KPMG Somekh Chaikin, have not performed a review of these consolidated interim financial statements of Intercure Ltd. (the Company).

Intercure Ltd.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As Of September 30, 2021

(Unaudited)

INDEX

	Page

Interim Condensed Consolidated Statements of Financial Position	4-5

Interim Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income	6

Interim Condensed Consolidated Statements of Changes in Equity	7-9

Interim Condensed Consolidated Statements of Cash Flows	10-11

Notes to Interim Condensed Consolidated Financial Statements	12-20

Intercure Ltd.

Interim Condensed Consolidated Statements of Financial Position

			September 30		September 30		December 31
			2021		2020		2020
	Note		NIS in thousands

Current assets
Cash and cash equivalents				208,979		47,800		37,888
Restricted cash				150		40		40
Trade receivables				25,310		13,164		12,466
Other receivables				25,208		3,124		3,680
Inventory		6		47,653		10,938		19,049
Biological assets		7		4,058		4,997		3,153
Financial assets measured at fair value through profit or loss		8		515		242		376

				311,873		80,305		76,652

Non-current assets
Property, plant and equipment and right-of-use asset				82,497		49,818		53,470
Goodwill				254,728		190,103		190,103
Deferred tax assets				2,888		-		2,904
Financial assets measured at fair value through profit or loss		8		3,617		626		3,141

				343,730		240,547		249,618

Total assets				655,603		320,852		326,270

Intercure Ltd.

Interim Condensed Consolidated Statements of Financial Position

	September 30			September 30			December 31
	2021			2020			2020
	NIS in thousands

Current liabilities
Loans and borrowings		53,777			878			1,254
Trade payables		53,201			15,322			18,622
Other payables		56,189			5,229			8,705
Short term loan from non-controlling interest		1,220			13,738			1,296

		164,387			35,167			29,877

Non-current liabilities
Liabilities to banks and other long-term liabilities		12,376			18			388
Liabilities in respect of employee benefits		156			154			155
Loan from related party		123			290			241
Financial liability measured at fair value through profit or loss		16,467			-			-
Lease liability		11,976			3,721			3,500

		41,098			4,183			4,284

Equity
Share capital, premium and other reserves		601,897			450,584			452,259
Capital reserve for transactions with controlling shareholder		2,388			2,388			2,388
Receipts on account of options		9,054			11,017			11,017
Accumulatedlosses		(183,397	)		(200,380	)		(191,158	)

Equity attributable to owners of the Company		429,942			263,609			274,506

Non-controlling interests		20,175			17,893			17,603

Total equity		450,117			281,502			292,109

Total equity and liabilities		655,603			320,852			326,270

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

Intercure Ltd.

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

		Nine months ended September 30,						Three months ended September 30,						Year ended December 31
		2021			2020			2021			2020			2020
	Note	NIS in thousands

Revenue			139,976			37,941			61,695			22,497			65,035
Cost of revenue before fair value adjustments			(80,600	)		(20,856	)		(37,013	)		(11,742	)		(34,649	)

Gross income before impact of changes in fair value			59,376			17,085			24,682			10,755			30,386

Unrealized changes to fair value adjustments of biological assets			3,761			2,417			1,316			723			3,202
Profit from fair value changes realized in the current year			(6,372	)		(1,143	)		(3,942	)		(223	)		(1,613	)

Gross Profit			56,765			18,359			22,056			11,255			31,975

Research and development expenses			(1,015	)		(1,234	)		(298	)		(448	)		(1,576	)
General and administrative expenses			(20,879	)		(14,126	)		(9,288	)		(4,892	)		(18,601	)
Selling and marketing expenses			(14,668	)		(5,376	)		(6,245	)		(2,492	)		(8,440	)
Other income (expenses), net			(1,401	)		(3,632	)		(1,692	)		(505	)		(4,563	)
Changes in the fair value of financial assets through profit or loss, net,			333			(39,845	)		8			(541	)		(37,195	)

Operating Profit (loss)			19,135			(45,854	)		4,541			2,377			(38,400	)

Financing income (expenses), net			(2,956	)		(137	)		(2,464	)		(181	)		92

Profit (Loss) before taxes on income			16,179			(45,991	)		2,077			2,196			(38,308	)

Taxes			(5,846	)		(277	)		(1,537	)		(277	)		2,268
Total comprehensive Profit (loss)			10,333			(46,268	)		540			1,919			(36,040	)

Attribution of net loss for the quarterly:
To the Company’s shareholders			7,761			(46,453	)		(1,644	)		1,734			(37,231	)
To non-controlling interests			2,572			185			2,184			185			1,191
Total			10,333			(46,268	)		540			1,919			(36,040	)

Loss per share
Basic Profit (loss)*			0.18			(0.42	)		(0.04	)		0.02			(0.32	)
Diluted Profit (loss)*			0.16			(0.42	)		(0.03	)		0.01			(0.32	)

* On April 8, 2021, the Company effectuated a capital consolidation. See note 3D.

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

Intercure Ltd.

Interim Condensed Consolidated Statements of Changes in Equity

	Share capital, premium and other reserves		Capital reserve for transactions with controlling shareholder		Receipts on account of options			Accumulated losses			Equity attributable to owners of the Company			Non-controlling interests		Total equity
	NIS in thousands

As of January 1, 2021		452,259		2,388		11,017			(191,158	)		274,506			17,603		292,109

Profit for the period				-					7,761			7,761			2,572		10,333
Exercise of share options		8,359				(1,963	)		-			6,396			-		6,396
Share-based payment		5,282		-		-			-			5,282			-		5,282
Issuance of shares, net		135,997		-		-			-			135,997			-		135,997

As of September 30, 2021		601,897		2,388		9,054			(183,397	)		429,942			20,175		450,117

As of January 1, 2020		406,297		2,388		1,214			(153,927	)		255,972			229		256,201
Allocation of shares for the acquisition of Cannolam		6,904										6,904			16,951		23,855
Profit (loss) for the period		-		-		-			(46,453	)		(46,453	)		185		(46,268	)
Exercise of share options		833		-		-			-			833			-		833
Issuance of shares, net		28,217				9,803						38,020					38,020
Share-based payment		8,333		-		-			-			8,333			528		8,861

As of September 30, 2020		450,584		2,388		11,017			(200,380	)		263,609			17,893		281,502

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

Intercure Ltd.

Interim Condensed Consolidated Statements of Changes in Equity

	Share capital, premium and other reserves		Capital reserve for transactions with controlling shareholder		Receipts on account of options			Accumelated losses			Equity attributable to owners of the Company			Non-controlling interests		Total equity
	NIS in thousands

As of July 1, 2021		595,625		2,388		10,268			(181,753	)		426,528			17,991		444,519

Profit (loss) for the period									(1,644	)		(1,644	)		2,184		540
Exercise of share options		4,808				(1,214	)					3,594					3,594
Share-based payment		1,464										1,464					1,464
Issuance of shares, net

As of September 30, 2021		601,897		2,388		9,054			(183,397	)		429,942			20,175		450,117

As of July 1, 2020		413,139		2,388		1,214			(202,114	)		214,627			757		215,384
Allocation of shares for the acquisition of Cannolam		6,904										6,904			16,951		23,855
Profit for the period									1,734			1,734			185		1,919
Issuance of shares, net		28,217				9,803						38,020					38,020
Share-based payment		2,324										2,324					2,324

As of September 30, 2020		450,584		2,388		11,017			(200,380	)		263,609			17,893		281,502

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

Intercure Ltd.

Interim Condensed Consolidated Statements of Changes in Equity

	Share capital, premium and other reserves		Capital reserve for transactions with controlling shareholder		Receipts on account of options		Accumelated losses			Equity attributable to owners of the Company			Non-controlling interests		Total equity
	NIS in thousands

As of January 1, 2020		406,297		2,388		1,214		(153,927	)		255,972			229		256,201

Profit (loss) for the year		-		-		-		(37,231	)		(37,231	)		1,191		(36,040	)
Exercise of share options		833		-		-		-			833					833
Allocation of shares for the acquisition of Cannolam		6,904		-		-		-			6,904			15,655		22,559
Issuance of shares, net		28,217		-		9,803		-			38,020					38,020
Share-based payment		10,008		-		-		-			10,008			528		10,536

As of December 31, 2020		452,259		2,388		11,017		(191,158	)		274,506			17,603		292,109

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

Intercure Ltd.

Interim Condensed Consolidated Statements of Cash Flows

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31
	2021			2020			2021			2020			2020
	NIS in thousands
Cash flows from operating activities

Profit (Loss) for the period		10,333			(46,268	)		540			1,919			(36,040	)
Interest paid		(2,894	)		(24	)		(2,199	)		(16	)		(93	)
Taxes on income paid		(1,853	)		-			(815	)					-
Adjustments required to present cash flows from operating activities (A)		13,720			44,713			12,071			4,422			43,936

Net cash provided by (used in) operating activities		19,306			(1,579	)		9,597			6,325			7,803

Cash flows from investing activities

Purchase of property, plant and equipment		(6,555	)		(16,118	)		(2,056	)		(4,653	)		(20,841	)
Issuance of loan		(4,972	)					(2,842	)					(1,643	)
Acquisition of Activity		(6,292	)					(1,326	)
Acquisition of Subsidiary		(21,996	)		387			(14,690	)		387			387
Investment in assets measured at fair value through profit or loss		(281	)		(626	)		(281	)		(626	)		(626	)
Restricted cash due to share issuance					(10,500	)
Release Restricted cash due to share issuance					10,500						10,500
Decrease in deposit		11						11
Increase in deposit		(11	)		(40	)								(40	)

Net cash used in investing activities		(40,096	)		(16,397	)		(21,184	)		5,608			(22,763	)

Cash flows from financing activities

Proceeds from issuance of shares as part of private issuance, net		-			38,020			-			27,520			38,020
Exercise of share options		6,396			833			3,594						833
Lease payments		(582	)		(407	)		(242	)		(168	)		(576	)
Receipt (repayment) of loans from banks		(100	)		(54	)		(19	)		(18	)		665
Repayment of loan to controlling shareholder		(4,534	)		(120	)		(3,923	)		(52	)		-
Repayment of loan to related party					-						-			(13,653	)
Issuance loans from banks		63,200						22,000						-
Issuance of shares, net		128,221												-
Net cash provided by financing activities		192,601			38,272			21,410			27,282			25,289

Increase in cash and cash equivalents		171,811			20,296			9,823			39,215			10,329
Exchange differences in respect of balances of cash and cash equivalents		(720	)		166			(1,113	)		(18	)		221
Balance of cash and cash equivalents at beginning of year		37,888			27,338			200,269			8,603			27,338

Balance of cash and cash equivalents at end of year		208,979			47,800			208,979			47,800			37,888

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

Intercure Ltd.

Interim Condensed Consolidated Statements of Cash Flows

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31
	2021			2020			2021			2020			2020
	NIS in thousands
A) Adjustments required to present cash flows from operating activities

Adjustments to items in the consolidated statement of comprehensive income:

Depreciation		4,185			2,182			1,684			1,379			3,253
share-based payment		5,282			8,333			1,464			2,324			10,008
Changes in the fair value of financial assets through profit or loss, net		(333	)		39,845			(8	)		541			37,195
Finance expenses (income), net		2,956			137			2,464			181			(92	)
Change in liabilities in respect of employee benefits, net					(40	)					(28	)		(39	)
Expenses (Income) tax		5,846			277			1,537			277			(2,268	)
		17,936			50,734			7,141			4,674			48,057
Changes in assets and liabilities items:

Decrease (increase) in trade receivables		459			(10,303	)		(2,614	)		(257	)		(9,608	)
Decrease (increase) in other receivables		(6,606	)		4,351			(5,155	)		597			5,139
Decrease (increase) in inventory		(6,620	)		(6,056	)		(1,277	)		393			(14,167	)
Increase in biological assets		(904	)		(3,852	)		(824	)		(4,662	)		(2,008	)
Increase (decrease) in trade payables		(7,730	)		8,966			3,762			3,354			12,269
Increase (decrease) in other payables		17,185			873			11,038			323			4,254

		(4,216	)		(6,021	)		4,930			(252	)		(4,121	)

		13,720			44,713			12,071			4,422			43,936

Intercure Ltd.

Notes to Interim Condensed Consolidated 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, Toronto Stock Exchange and Nasdaq, domiciled in Israel. Its offices are located in Herzliya. The Company is engaged in the medical cannabis sector through its holding of the entire issued and paid-up capital of Canndoc Ltd. (hereinafter: “Canndoc”), and through its 50.1% stake in the issued and paid-in capital of Cannolam Ltd, The Company also has additional holdings in the biomed sector.

		Investments in the biomed sector:
		The Company invested in two companies in the biomed sector: Regenera Pharma Ltd. (hereinafter: “Regenera”) and NovellusDX Ltd. (hereinafter: “Novellus”).

	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.
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	-	Companies which are not under the Company’s control, and which are presented according to the equity method.

Note 2 -	Significant Accounting Policies

	Preparation basis of the financial statements

	The Group’s condensed consolidated financial statements (hereinafter: the “Interim Financial Statements”) were prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” (hereinafter: “IAS 34”).

	These financial statements have been prepared in a condensed format as of September 30, 2021, and for the nine months then ended (“interim condensed consolidated financial statements”). These financial statements should be read in conjunction with the Company’s annual financial statements as of December 31, 2020, and for the year then ended and accompanying notes (“annual consolidated financial statements”).

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 3 -	Significant Transactions and Events During the Reporting Period

	A.	On January 3, 2021, the Company engaged in a merger agreement (hereinafter: the “Prior Agreement”) with Subversive Real Estate Acquisition REIT LP (“Subversive”), a third party unrelated to the Company and/or to its controlling shareholders, which is listed on the Canadian stock exchange NEO (NEO:SVX.U).

		On February 9, 2021, the parties engaged in an amended and definitive agreement with Subversive Real Estate Acquisition REIT LP (formerly Subversive Real Estate Acquisition REIT LP) (“SVX”) a special purpose acquisition company (SPAC), pursuant to which the Company, through a wholly-owned subsidiary, will acquire all of the outstanding limited partnership units of SVX in exchange for the issuance of the company ordinary shares by way of a plan of arrangement (the “SPAC Transaction”).

		Concurrently with the SPAC Transction, Subversive conducted a non-brokered private placement of 5.0 million Limited Partnership Units for an aggregate amount of $50 million (approximately NIS162 million) At the closing of the SPAC Transaction, which occurred on April 23, the Company issued 15,650,280 ordinary shares to Subversive unit holders, including those that participated in the concurrent private placement. Out of the total 15,650,280 ordinary shares issued, 5,243,616 of our ordinary shares were allocated as part of the SPAC Transaction to subversive’s sponsors and are subject to forfeiture unless the Company’s ordinary shares are listed on NASDAQ and obtain a target weighted average price per share of $13.00 (subject to appropriate adjustments) for any five (5) consecutive trading days during the thirty (30) trading days after the shares are traded on Nasdaq. By October 13, 2021 that condition was not met and 5,243,616 ordinary shares are up for forfeiture. Since the subversive’s sponsors shares were an integral part of the transaction with the SPAC and constituted a conditional issue for the amount of funds raised in the transaction and its success, the shares issue is presented together with all of SPAC units holders and PIPE investors and not in fair value.

		Total net funds raised from the SPAC Transaction, after redemptions, and the private placement equalled approximately NIS 182 million. (which 8 million NIS of those still needs to be received and currently presented in Other receivables).

		Since Subversive was not be considered a business, as defined by IFRS 3, the SPAC transaction was accounted for as a share-based payment transaction within the scope of IFRS.

		On April 23, 2021, the Company shares were listed on the TSX and the first trade of the common shares on the TSX occurred on April 26, 2021

	B.	In January 2021, the Company engaged, through Cannolam, in an Agreement to purchase pharmacies located in Ashdod and Herzliya.

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

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

	C.	On January 26, 2021, the Company published an outline of options for Company employees and officers, including an offer of up to 4,303,356 unlisted options, exercisable into up to 4,303,356 ordinary Company shares with no par value (hereinafter: the “Options”), which are offered in accordance with the 2015 options plan, to employees and officers of the Company and/or of the subsidiary Canndoc. The options in accordance with the outline were allocated on March 15, 2021. (grant date)

		The fair value of the option at the grant date was NIS 5.095 and the options will be vested at 16 equal quarters in 4 years, beginning on the day of the grant.

	D.	On April 1, 2021, the general assembly approved an increase of the Company’s registered capital and a reverse split of the issued capital of the Company at the ratio of 1:4.44926 so that the Company’s issued shares subsequent to the reverse split is 27,021,100.

		The capital consolidation was effectuated on April 8, 2021.

		In accordance with the requirements of IAS 33 – Earnings per share, the denominators for the nine- and three-month periods ended September 30, 2020, and the year ended December 31, 2020, were retrospectively adjusted to reflect the reverse split.

		The impact of the capital consolidation is also included in Note 21 of the 2020 financial statements

	E.	On April 27, 2021, the Company issued to Mr. Alexander Rabinovich, CEO, 224,756 options to purchase 224,756 ordinary shares of Intercure. The options were granted following the General Assembly from August 2019 as part of Canndoc acquisition transaction and as approved by the Company’s general assembly on April 1, 2021 as part of the Transaction. On September 2, 2021 Mr. Alexander Rabinovich exercised 2,150,919 options to ordinary shares of Intercure. In addition, during September 2021, Mr. Alexander Rabinovich purchased in the open market 423,501 ordinary shares of Intercure.

	F.	On August 31, 2021, the Company issued options for Company employees, officers and advisors 340,170 unlisted options, exercisable into up to 340,170 ordinary Company shares with no par value (hereinafter: the “Options”), The fair value of the option at the grant date was NIS 9.376 and the options will be vested at 16 equal quarters in 4 years, beginning on the day of the grant.

	G.	On September 1, 2021, the Company shares were listed and the first trade of the ordinary shares on the Nasdaq Global Market under the ticker symbol “INCR”.

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 4 -	Business combinations

		During ther period, the Company completed 2 non-material acquisitions:

	A.	In May 18, 2021, the Company acquired “Pharma-Zone”, business of 2 pharmacies and licensed trading house located in Raanana.

	B.	In June 3, 2021, the Company acquired, through Cannolam, 51% of “Kineret” pharmacy located in Kfar Saba.


	C.	On July 6, 2021, the Company engaged, in an Agreement to purchase, through Cannolam, “Green-Zone” pharmacy located in Yokneham.

	D.	On July 6, 2021, the Company engaged, in an Agreement to purchase “Green-Log” wholeseller located in Yokneham.

	E.	On August 5, 2021, the Company engaged, in an Agreement to purchase “My Club” pharmacy located in Em Haderech.

	F.	On August 8, 2021, the Company engaged, in an Agreement to purchase 51% of “Club Pharm Shely” pharmacy located in Binyamina.

	G.	On august 11, 2021, the company engaged, in an agreement to purchase all 3 pharmacies (“max pharm rishon”, “max pharm holon” and another one in petach) and consulting center from cannomed. All of the pharmacies acquired are licenced to sell medical cannabis. petah tikva pharmacy is in the process of getting licensed.

	The initial accounting for the business combinations is incomplete because the acquisitions occurred shortly before the end of the period and thus we are still obtaining the information necessary to identify and measure items such as intangible assets. Accordignly, the amounts recognized in our financial statements for these items are regarded provisional as at September 30, 2021.

Note 5 – Cultivating facilities

Canndoc has partnered with Kibbutz Beit HaEmek and Kibbuutz Nir-Oz (the “Kibbutzim”) for the purpose of breeding, cultivating and harvesting of pharmaceutical-grade cannabis.

Canndoc has entered the ‘Northern Kibbutz Partnership Agreement’ with Kibbutz Beit HaEmek in May 2015 and since then, its activities are not conducted through a separate legal entity. Canndoc is responsible for establishing all the facilities of the activity in the premises of Kibbutz Beit HaEmek required for the manufacturing and for conducting all the operational activities. Canndoc is the owner of all the facilities and equipment required for the manufacturing and the operations of this agreement are carried out by Canndoc’s employees.

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 5 – Cultivating facilities (cont.)

In Kibbutz Beit HaEmek, as of September 30, 2021 the Company had approximately NIS 10 million in Property, plant and equipment, net, in respect of facilities that are used by the activity. Held inventory and biological assets of approximately NIS 2 million, with immaterial amount of liabilities that are directly attributed to the activity.

During the reporting period the activity generated revenue of approximately NIS 3 million and generated a net loss of approximately NIS 1 million (30% of these results is attributable to Kibbutz Beit HaEmek).

In Kibbuutz Nir-Oz, as of September 30, 2021 the Company had approximately NIS 45 million in Property, plant and equipment, net, in respect of facilities that are used by the activity. Held inventory and biological assets of approximately NIS 10 million, with immaterial amount of liabilities that are directly attributed to the activity.

During the reporting period the activity generated revenue of approximately NIS 10 million and generated a net loss of approximately NIS 2 million (26% of these results is attributable to Kibbutz Nir-Oz).

For additional details please see the company annual financial report note 1.

Note 6 - 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.

	September 30		December 31
	2021		2020
	NIS in thousands
Finished goods		31,210		7,640
Goods in process and dried inflorescence		16,443		11,409
Total inventory		47,653		19,049

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 7 - Biological Assets

The Company measures 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:

	September 30			December 31
	2021			2020
	NIS in thousands
Balance as of January 1		3,153			1,145
Costs of growing medical cannabis plants		21,027			10,450
Change in fair value less selling costs		3,892			3,202
Transfer to inventory		(24,014	)		(11,644	)
Balance at end of the period		4,058			3,153

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

below are the main assumptionused:

	September 30			December 31
	2021			2020
Net growing area (in thousands of square meters)		10.5			10.5
Estimate net yield as of the reporting date (tons) (1)		1.6			2.1
Estimated net selling price (NIS per gram) (2)		12-19			12-19
Estimated ratio of products which will be sold as inflorescence (in percent) (3)		85	%		85	%
Estimated ratio of products which will be sold as oil (in percent) (3)		15	%		15	%
Estimated growing cycle length (in weeks) (4)		13-15			13-15
Estimated growing cycle completion rate (in percent) (5)		15	%		15	%
Proportion of plants which do not reach the harvesting stage		8	%		8	%

	(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)	The Company’s estimate regarding the future ratio of sales
	(4)	In accordance with the Company’s experience, and according to the strains which exist as of the reporting date
	(5)	By planting date vs. growing cycle length

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 7 - Biological Assets (cont.)

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:

	September 30			December 31
	2021			2020
	NIS in thousands
Change of average selling price		406			315
Change of proportion of oil products		21			27
Change of proportion of plants which do not reach harvest		(179	)		(394	)

Note 8 - Investments in Financial Assets Measuredat Fair Value Through Profit or Loss

As of September 30, 2021 and as of December 31, 2020, the company holds 3,840,617 shares of XTL biopharmaceuticals ltd. (hereinafter: “XTL”).

	September 30		December 31
	2021		2020
	NIS in thousands
Balance as of January 1,		376		177
Changes in fair value carried to the statement of income		139		199
Balance as of September 30,		515		376

The Company’s investments in biomed companies are revalued at fair value through profit and loss. The fair value is determined according to valuations, which are mostly performed using the OPM method.

	September 30		December 31
	2021		2020
	NIS in thousands
Fair value of the investment in Regenera	-		-
Fair value of the investment in Novellus		3,617		3,141
		3,617		3,141

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 9 - Operating segment data

	NIS in thousands*
	Cannabis segment		Biomed segment		Reconciliations and other		Total

Nine months ended September 30, 2021
External revenue		139,976		-		-		139,976
Segment profit (loss)		29,010		333		-		29,343

General and administrative expenses not attributable to segments								(8,807	)
Other expenses, net								(1,401	)
Operating Profit								19,135

	NIS in thousands*
	Cannabis segment		Biomed segment			Reconciliations and other		Total

Nine months ended September 30, 2020
External revenue		37,941							37,941
Segment profit (loss)		6,331		(39,845	)		450		(33,064	)

General and administrative expenses not attributable to segments									(9,158	)
Other expenses, net									(3,632	)
Operating loss									(45,854	)

	NIS in thousands*
	Cannabis segment		Biomed segment		Reconciliations and other		Total

Three months ended September 30, 2021
External revenue		61,695		-		-		61,695
Segment profit (loss)		9,731		8		-		9,739

General and administrative expenses not attributable to segments								(3,506	)
Other expenses, net								(1,692	)
Operating Profit								4,541

Intercure Ltd.

Notes to Interim Condensed Consolidated Financial Statements

Note 9 - Operating segment data (cont.)

	NIS in thousands*
	Cannabis segment		Biomed segment			Reconciliations and other		Total

Three months ended September 30, 2020
External revenue		22,497							22,497
Segment profit (loss)		6,091		(541	)		90		5,640

General and administrative expenses not attributable to segments									(2,758	)
Other expenses, net									(505	)
Operating Profit									2,377

	NIS in thousands*
	Cannabis segment		Biomed segment			Reconciliations and other		Total

Year ended December 31, 2020
External revenue		65,035		-			-		65,035
Segment profit (loss)		14,250		(37,195	)		-		(22,945	)

General and administrative expenses not attributable to segments									(10,892	)
Other expenses, net									(4,563	)
Operating loss									(38, 400)

Segment assets		124,759		3,517			197,994		326,270
Segment liabilities		23,935		-			10,227		34,162

Note 10 - Subsequent events:

On October 20, 2021, the Company engaged, in an Agreement to purchase 51% of “Maayan Haim” pharmacy located in Bet Dagan which have a licensed to sell medical cannabis.

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