Intercure Ltd. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS As of

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

of September 30, 2022

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

of September 30, 2022

Immaterial adjustment of comparative data, see Note 2 (2)

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

Immaterial adjustment of comparative data, see Note 2 (2)

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

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

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

Reclassified due to change in accounting policy, see Note 2(3).

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

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 mainly through

its holdings of the entire issued and paid-up capital of Canndoc Ltd. (hereinafter: "Canndoc"), the entire issued and paid-up

capital of Pharmazone Ltd. (hereinafter: "Pharmazone") and through its 50.1% stake in the issued and paid-in capital of Cannolam

Ltd. (hereinafter: "Cannolam"). The Company also has additional holdings in the biomed sector.

2022, the Company engaged in 4 agreements for the acquisition of pharmacies. See note 3A.

in the biomed sector:

Company invested in three companies in the biomed sector: Regenera Pharma Ltd. (hereinafter: "Regenera"), F.O.R.E Biotherapeutics

Ltd. (formerly known as NovellusDX Ltd., hereinafter: "Fore") and Cavnox Ltd. (hereinafter: "Cavnox"). For additional

details regarding investments in the biomed sector, see Note 7.

these consolidated financial statements:

Note 2 - Significant Accounting Policies

Group's condensed consolidated financial statements (hereinafter: the "Interim Financial Statements") have been prepared

in accordance with International Accounting Standard 34, "Interim Financial Reporting" (hereinafter: "IAS 34").

financial statements have been prepared in a condensed format as of September 30, 2022, and for the nine months then ended ("condensed

consolidated interim financial statements"). These financial statements should be read in conjunction with the Company's

annual financial statements as of December 31, 2021 and accompanying notes ("annual consolidated financial statements").

condensed consolidated interim financial statements were authorized for issue by the Group's Board of Directors on November 14

to release of the Company's annual consolidated financial statements and prior to the release date of these interim condensed consolidated

financial, an error was discovered in the accounting treatment of Non-controlling interests.

Company examined the materiality of the error that was discovered in its financial statements with respect to the relevant reporting

periods, and after examining the quantitative and qualitative parameters it reached the conclusion that the aforesaid error has no effect

on how the users of the consolidated financial statements make economic decisions and/or analyze the aforesaid financial statements.

Therefore, the error is not a material error that requires issuing revised consolidated financial statements of the Group.

hereunder are the effects of the correction, which was included in the comparative data in these interim financial statements by marking

the corrected items with "immaterial adjustment".

Note 2 - Significant Accounting Policies (Cont'd)

the reporting period, the Company changed the classification of interest paid to be presented under financing activities instead of operating

Company considered this classification more appropriate and provides more relevant information about the Company's transactions

on the cash flow statements.

Note 3 - Transactions and Events During the Reporting Period

January 19, 2022, the Company engaged in an agreement to purchase 51% of "Orni" pharmacy located in Tel Aviv.

February 5, 2022, the Company engaged in an agreement to purchase 100% of "Maayan Haim" pharmacy located in Ashdod.

April 24, 2022, the Company engaged in an agreement to purchase 51% of "Amidar" pharmacy located in Naharia.

May 15, 2022, the Company opened a pharmacy in Vienna, Austria, which is fully owned by Cannolam.

July 27, 2022, the Company engaged in an agreement to purchase 51% of "Refua Center" pharmacy located in Bnei Brak.

3 - Transactions and Events During the Reporting Period (Cont'd)

hereunder is information regarding the techniques the Gcn:

Group has NIS 12,780 thousand of contingent considerations.

3 - Transactions and Events During the Reporting Period (Cont'd)

consideration which was paid in the business combination included amounts associated with the expected benefits from synergy (collaboration),

growth in revenue, and future developments in the Subsidiaries operating market. These benefits are not recognized separately from goodwill,

since the future economic benefits which are expected to arise from them are not reliably measurable. All of the above led to the recognition

of goodwill in the amount of NIS 16,761 thousand.

The total sum of non-controlling interests in the Subsidiaries which was recognized on the acquisitions date is NIS )155) thousand. The

non-controlling interests measured at the date of the business combination at their proportionate interest in the identifiable assets

and liabilities of the acquiree.

the reporting period the Company repaid loans in an aggregate amount of NIS 78 million.

Cannabis Agency (IMCA), the Toronto Stock Exchange (TSX), as well as the approval of the court in Israel.

4 - Cultivating Facilities

has an advanced propagation and growing facility which is located in Kibbutz Beit HaEmek, in which it develops and grows a wide

variety of unique strains of medical cannabis (hereinafter: the "Northern Facility"). As of the reporting date, the

northern facility is spread over an area of approximately 5 dunams, whereby Canndoc has the right of first refusal regarding an

option to expand the area of the northern facility to a total area of approximately 16 dunams. The northern facility includes a

greenhouse for propagating, growing and florescence, as well as a processing facility and operational areas. During the reporting

period, Canndoc performed extension, upgrade and adjustment works on the northern facility, for the purpose of ensuring the northern

facility's compliance with the high-quality standards required to export from Israel and adjusting the quality of the products

to the level required in Israel and in the target countries. The performance of the upgrade works was concluded in the fourth

quarter of 2019; On May 21, 2020, an addendum to the agreement was signed, which formalized, inter alia, the investment in the

Company's facility in Beit HaEmek. As of the publication date of the report, the suspensory conditions for the fulfillment of

the agreement have not yet been met.

Kibbutz Beit HaEmek, as of September 30, 2022 the Company had approximately NIS 11 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