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Sunday, March 26, 2023

InterCure Sues Better Over Funds During Failed Merger

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The loans look to be over $9 million.

InterCure Ltd. (Nasdaq: INCR), also known as Canndoc, filed a lawsuit against Cann Pharmaceuticals Ltd., also known as Better, to recover some of the money that was loaned to and invested in the company when the two contemplated a merger.

In the company’s earnings filing in November, a footnote stated in its “Other Receivables” section that the balance included “an amount of approximately NIS 34 million loaned to third parties in connection with potential acquisitions which have not yet been materialized.” Using today’s currency conversion, that is roughly $9.6 million.

During the merger process, InterCure said it extended loans to Better and provided funding and cultivation services to it, in light of the parties’ cooperation. However, the merger didn’t go as planned, and the agreement was terminated.

InterCure said it has tried to recover the money but that Better has refused to pay the money back.

The company announced the acquisition was in trouble in November 2022 and cited fundamental disagreements between the parties. InterCure also said that the closing conditions contained in the agreement were not met, and the agreement was terminated.

InterCure also said at the time that it was owed significant amounts loaned and advanced to Better.

InterCure reported in November that it had revenue of $39 million (NIS 101 million), which represented 63% growth from the third quarter of 2021 and represented sequential growth of 6%. It was the 11th consecutive quarter of growth, representing an annualized run rate of over $155 million (more than NIS 402 million).

The company also said that its revenue growth was expected to continue in the fourth quarter of 2022.

At the time it also said that it was the first company to comply with the new strict 109 import regulations of the Israel Medical Cannabis Agency, resuming the importation of medical cannabis to Israel.

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