InterCure : FORM 20-F For the fiscal year ended December 31, 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 20-F

• REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________to _____________

OR

• SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _____________

Commission File No.:

INTERCURE LTD.

(Exact name of registrant as specified in its charter)

Not Applicable

(Translation of Registrant's name into English)

Israel

(Jurisdiction of incorporation or organization)

85 Medinat ha-Yehudim Street

Herzliya, 4676670, Israel

(Address of principal executive offices)

Amos Cohen

85 Medinat ha-Yehudim Street

Herzliya, 4676670, Israel

Tel: [phone]

[e-mail]

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Copies to:

Mark S. Selinger, Esq.				Ronen Kantor, Esq.
Gary Emmanuel, Esq.				Doron Tikotzky Kantor
Eyal Peled, Esq.				Gutman & Amit Gross
Greenberg Traurig, LLP				B.S.R. 4 Tower, 33 Floor
One Vanderbilt Avenue				7 Metsada Street,
New York, NY 10017				Bnei Brak 5126112 Israel
+1 212.801.9200				Tel: [phone]
Securities registered or to be registered pursuant to Section 12(b) of the Act:
				Name of each exchange on which
Title of each class:		Trading Symbol:		registered or to be registered
Ordinary Shares		INCR		Nasdaq Capital Market

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of December 31, 2023: 45,572,689.

Indicate by check mark whether Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past

90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "accelerated filer", "large accelerated filer", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated Filer ☐

Accelerated Filer ☐

Non-accelerated Filer ☒

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit

report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐

Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐

International Financial Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐

If "Other" has been check in response to the previous question, by check mark which financial statement item Registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

INTRODUCTION

Intercure is an Israeli public corporation whose shares are listed for trading on the Nasdaq Global Market under the symbol "INCR" and on the Tel Aviv Stock Exchange ("TASE") under the symbol "INCR".

Unless indicated otherwise by the context, all references in this Annual Report on Form 20-F to "Intercure", the "Company", "our Company", "we", "us", "our" or the "Registrant" are to Intercure Ltd. and its subsidiaries.

Our functional currency and reporting currency are the New Israeli Shekel (NIS). Unless otherwise noted, all monetary amounts are in NIS. References to "USD," "U.S. dollars" or "$" are to currency of the United States of America, references to "CAD" or "C$" are to Canadian dollars, and references to "NIS" are to New Israeli Shekels. References to "ordinary shares" or "Intercure Shares" are to our ordinary shares, no par value.

Effective as of April 8, 2021, we effectuated a 1-for-4.44926 share consolidation of our outstanding ordinary shares, pursuant to which the number of our outstanding ordinary shares was decreased to 27,021,100 ("Share Consolidation"). We have adjusted all outstanding options, warrants and other rights entitling their holders to purchase ordinary shares, as required by the terms of these securities. In particular, we have reduced the conversion ratio used in the Share Consolidation, and we increased the exercise price in accordance with the terms of each security based on the same ratio. The Share Consolidation did not otherwise affect any of the rights currently accruing to holders of our ordinary shares, or options or warrants exercisable for our ordinary shares.

PRESENTATION OF FINANCIAL INFORMATION

We have included in this Annual Report on Form 20-F our audited consolidated financial statements as of December 31, 2023 and 2022, and for each of the years in the three-year period ended December 31, 2023. Our consolidated financial statements appearing in this registration statement are prepared in New Israeli Shekels and in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"), and are audited in accordance with the standards of the PCAOB.

MARKET, INDUSTRY AND OTHER DATA

This Annual Report on Form 20-F includes market and industry data and forecasts that were obtained from third-party sources, industry publications and publicly available information as well as industry data prepared by management on the basis of its knowledge of the industry in which Intercure operates (including management's estimates and assumptions relating to the industry based on that knowledge). Management's knowledge of the cannabis industry has been developed through its experience and participation in the industry. Management believes that its industry data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness of this data. Third-party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information. Although management believes it to be reliable, Intercure has neither independently verified any of the data from management or third-party sources referred to in this registration statement, nor analyzed or verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained the underlying economic assumptions relied upon by such sources. In addition, assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Item 3.D "Risk Factors" below.

Statements made in this Annual Report on Form 20-F concerning the contents of any contract, agreement or other document are summaries of such contracts, agreements or documents and are not complete descriptions of all of their terms. If we filed any of these documents as an exhibit to this Annual Report, you may read the document itself for a complete description of its terms, and the summary included herein is qualified by reference to the full text of the document which is incorporated by reference into this registration statement.

2

NON-IFRS FINANCIAL MEASURES

In this Annual Report on Form 20-F, Intercure uses certain non-IFRS financial measures to measure, compare and explain the operating results and financial performance of Intercure. 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. Intercure defines such financial measures as follows:

"Adjusted EBITDA" means EBITDA 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.

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 Item 5. "Operating and Financial Review and Prospects - A. Operating Results."

3

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except for the historical information contained in this Annual Report on Form 20-F, the statements contained in this Annual Report are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, as amended, and other federal securities laws with respect to our business, financial condition and results of operations. All information other than statements of current and historical fact are forward-looking statements. 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 included in this Annual Report should not be unduly relied upon. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report. 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 2024;
• 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 develop an active trading market for the Intercure Shares and whether the market price of the Intercure 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 (the "IMCA") and Israeli authorities, as well as the ability to obtain import permits into Israel for future cannabis shipments;

4

• the listing or continued listing of the Intercure Shares;
• the provisions in the Articles of Association of Intercure Ltd. ("Intercure Articles");
• The conflict in the Middle East, and specifically on-going armed conflict between Israel and its neighbors (Gaza strip and Lebanon);
• 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;
• the continuing anticipated and potential adverse impacts resulting from the COVID-19 pandemic;
• expected industry trends;
• general economic trends;
• 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. You should read this Annual Report on Form 20-F and the documents that we reference herein and have filed as exhibits to the Annual Report completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this Annual Report is accurate as of the date hereof. Because the risk factors referred to in Item 3.D. "Risk Factors" of this Annual Report, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. 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 Annual Report, and particularly our forward-looking statements, by these cautionary statements.

5

								TABLE OF CONTENTS
PART I											8
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.	8
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE.	8
ITEM 3.	KEY INFORMATION.	8
A.	Reserved.	8
B.	Capitalization and Indebtedness.	8
C.	Reasons for the Offer and Use of Proceeds.	8
D.	Risk Factors.	9
ITEM 4.	INFORMATION ON THE COMPANY.	40
A.	History and Development of the Company.	40
B.	Business Overview.	42
C.	Organizational Structure.	69
D.	Property, Plants and Equipment.	69
ITEM 4A.	UNRESOLVED STAFF COMMENTS	70
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS.	71
A.	Operating Results.	71
B.	Liquidity and Capital Resources.	81
C.	Research and Development.	83
D.	Trend Information.	83
E.	Critical Accounting Estimates.	84
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.	84
A.	Directors and Senior Management.	84
B.	Compensation.	86
C.	Board Practices.	90
D.	Employees.	103
E.	Share Ownership.	103
F.	Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation	104
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.	104
A.	Major Shareholders.	104
B.	Related Party Transactions.	106
C.	Interests of Experts and Counsel.	106
ITEM 8.	FINANCIAL INFORMATION.	107
A.	Consolidated Statements and Other Financial Information.	107
B.	Significant Changes.	112
ITEM 9.	THE OFFER AND LISTING.	112
A.	Offer and Listing Details.	112
B.	Plan of Distribution.	112
C.	Markets.	112
D.	Selling Shareholders.	113
E.	Dilution.	113
F.	Expenses of the Issue.	113
ITEM 10.	ADDITIONAL INFORMATION.	113
A.	Share Capital.	113
B.	Memorandum and Articles of Association.	113
C.	Material Contracts.	113
D.	Exchange Controls.	113
E.	Taxation.	114
F.	Dividends and Paying Agents.	122
G.	Statement by Experts.	122
H.	Documents on Display.	122
I.	Subsidiary Information.	122
J.	Annual Report to Security Holders.	122
	6

ITEM 11.		QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK.	123
ITEM 12.		DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.	123
	A.	Debt Securities.	123
	B.	Warrants and rights.	123
	C.	Other Securities.	123
	D.	American Depositary Shares.	123
PART II
ITEM 13.		DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.	123
ITEM 14.		MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.	123
ITEM 15.		CONTROLS AND PROCEDURES.	124
ITEM 16.	A.	AUDIT COMMITTEE FINANCIAL EXPERT.	124
ITEM 16.	B.	CODE OF ETHICS.	124
ITEM 16.	C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.	125
ITEM 16.	D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.	125
ITEM 16.	E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.	125
ITEM 16.	F.	CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.	125
ITEM 16.	G.	CORPORATE GOVERNANCE.	125
ITEM 16.	H.	MINE SAFETY DISCLOSURE.	127
ITEM 16.	I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	127
ITEM 16.	J.	INSIDER TRADING POLICIES	127
ITEM 16.	K.	CYBERSECURITY	127
PART III
ITEM 17.		FINANCIAL STATEMENTS.	127
ITEM 18.		FINANCIAL STATEMENTS.	127
ITEM 19.		EXHIBITS.	129
		7

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

1. Reserved.
2. Capitalization and Indebtedness. Not applicable.
3. Reasons for the Offer and Use of Proceeds. Not applicable.

8

1. Risk Factors.

Investing in our ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below, in addition to the other information set forth in this Annual Report on Form 20-F, including the consolidated financial statements and the related notes included elsewhere in this registration statement, before purchasing our ordinary shares. If any of the following risks actually occurs, our business, financial condition, cash flows and results of operations could be negatively impacted. In that case, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Summary Risk Factors

Investing in our ordinary shares involves a high degree of risk, as fully described below. The principal factors and uncertainties that make investing in our ordinary shares risky, include, but are not limited to:

• The medical-use cannabis industry in Israel and other countries is highly regulated;
• We are dependent upon regulatory approvals and licenses for our ability to produce and distribute our pharmaceutical-grade cannabis products;
• Research on the effects of cannabis has been limited.
• We compete for market share with companies that may have longer operating histories, more financial resources, and greater manufacturing and marketing experience than us.
• Legal and illegal use of cannabis for non-medical purposes may have a significant negative effect on the medical-use cannabis industry and our pharmaceutical-grade cannabis business.
• Our business is subject to, or may become subject to, a variety of U.S. and foreign laws relating to the production and distribution of cannabis, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business.
• We are subject to risks inherent in an agricultural business, which include the risk of crop failure.
• We have a limited operating history upon which investors can evaluate our future prospects.
• We may be adversely impacted by the failure of any of our joint ventures.
• We may be unable to comply with all safety, health and environmental regulations applicable to our operations and the medical-use cannabis industry.
• Our pharmaceutical-gradecannabis-based products may be subject to recalls and we may be subject to product liability claims.
• We may experience breaches of security at our facilities or losses as a result of, but not limited to, theft.
• If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches that disrupt our operations or result in the unintended dissemination of protected personal information or proprietary or confidential information, or we are found by regulators to be non-compliant with statutory requirements for protection and storage of personal data, we could suffer a loss of revenue and increased costs, exposure to significant liability, reputational harm and other serious negative consequences.
• Third-partymanufacturers and distributors may not successfully carry out their contractual duties or meet regulatory requirements.
• We may not be able to secure adequate or reliable sources of funding required to operate our business or increase our production to meet patient demand for our products.
• We will incur increased costs as a result of operating as a public company in the U.S.
• We intend to follow the reduced disclosure requirements applicable to emerging growth companies.
• We are a "foreign private issuer" and intend to follow certain home country corporate governance practices.
• We may not be able to successfully execute strategic alliances or transactions.
• International expansion of our business exposes us to business, regulatory, political, operational, financial, economic and other potential risks associated with doing business outside of Israel.
• Tax and accounting requirements may change in ways that are unforeseen to us and we may face difficulty or be unable to implement or comply with any such changes.
• A breakdown in our information technology systems could result in a significant disruption to our business.
• Future sales or distributions of our securities could cause the market price for our ordinary shares to fall.

9