Financial Statements as of September 30, 2025

INNOCAN PHARMA CORPORATION

TABLE OF CONTENTS

Unaudited condensed interim consolidated statements of financial position 2-3

Unaudited condensed interim consolidated statements of profit or loss 4

Unaudited condensed interim consolidated statements of changes in shareholders' equity 5

Unaudited condensed interim consolidated statements of cash flows 6

Notes to the unaudited condensed interim consolidated financial statements 7-33

Total non-current liabilities 1,523 -

SHAREHOLDERS' EQUITY: 5

TOTAL LIABILITIES AND SHAREHOLDERS'

EQUITY 11,117 9,260

Nelson Halpern Chief Financial Officer

Iris Bincovich Chief Executive Officer

Peter Bloch Audit Committee Chair

November 26, 2025 Date of approval of the Financial statements

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

(*) On September 5, 2025, the Company effected a 1-for-65 reverse share split of its issued and outstanding common shares, pursuant to which holders of the Company's common shares received 0.0154 of a common share for every one common share. All share amounts have been retroactively restated for all periods presented. See also note 1.12

(*) On September 5, 2025, the Company effected a 1-for-65 reverse share split of its issued and outstanding common shares, pursuant to which holders of the Company's common shares received 0.0154 of a common share for every one common share. All share amounts have been retroactively restated for all periods presented.

1. Innocan Pharma Corporation (the "Company") was incorporated as a corporation in Canada and commenced its operations in May 2018. The Company's registered office is in Calgary, Canada.

2. The Company is a publicly listed company on the Canadian Securities Exchange (the "CSE") trading under the symbol INNO and is the parent company of Innocan Pharma Ltd. (the "Innocan") that was incorporated in Israel in October 2017 and commenced its operations in November 2017. Innocan is developing a Cannabidiol ("CBD")-loaded Liposome drug delivery Platform ("CBD-LPT") with exact dosing, prolonged and controlled release of synthetic CBD for non-opioid pain management. The CBD-LPT research is in the preclinical trial phase for chronic pain management. Innocan is at a preclinical stage and is expected to conduct activities mainly in the United States (US), Canadian and European (EU) markets. The Company also develops and markets self-care products to promote a healthier lifestyle.

3. On May 26, 2021, Innocan entered into a founder's agreement with Brandzon Co Ltd. (the "Brandzon") to establish a joint company, B.I. Sky Global Ltd. (the "Sky Global"), which engages in development, manufacture and marketing of cosmetic products. Innocan holds 60% of Sky Global's shares, while Brandzon holds the remaining 40%. Sky Global was incorporated in Israel on June 6, 2021. The Company consolidates Sky Global in the financial statements commencing on the date of establishment.

4. On May 5, 2021, Innocan Pharma UK Ltd. (the "Innocan UK") was established as a management and financial services provider of Innocan in the EU market regarding the sales of its CBD cosmetic products. Innocan holds 100% of Innocan UK's shares. The Company consolidates Innocan UK in the financial statements commencing on the date of establishment. During 2022 and 2023, Innocan UK had no activities. On August 13, 2024, Innocan UK was dissolved.

5. The Company, Innocan, Innocan UK and Sky Global are referred in the financial statements as the Group.

6. In October 2023, Hamas terrorists infiltrated Israel's southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel's border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel's security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks.

   In addition, since the commencement of these events, there had been continued hostilities along Israel's northern border with Lebanon (with the Hezbollah terror organization) and on other fronts from various extremist groups in the region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq. Israel had carried out a number of targeted strikes on sites belonging to these terror organizations. In October 2024, Israel began limited ground operations against Hezbollah in Lebanon, and in November 2024, a ceasefire was brokered between Israel and Hezbollah. In addition, Iran recently launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel and is widely believed to be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq.

   On June 15, 2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a pre-emptive strike directly targeting military and nuclear infrastructure inside Iran, aimed at disrupting Iran's capacity to coordinate or launch further hostilities against Israel, as well as to degrade its nuclear program. In response, Iran launched multiple waves of drones and ballistic missiles at Israeli cities, including Tel Aviv, Haifa, and Jerusalem. While most of these attacks were intercepted, several caused civilian casualties and damage to infrastructure. The Israeli military had conducted additional operations against Iranian assets. In October 2025, after 2 years of fighting, a ceasefire was reached between Israel and Hamas. However, the situation remains volatile, and the risk of a broader regional escalation involving additional actors still exists.

   Since the war broke out on October 7, 2023, the Group's operations have not been adversely affected by this situation, and the Group has not experienced disruptions to its business operations. As such, the Group's product and business development activities remain on track.

   The Group continues to assess the effects of the state of war on its financial statements and business.

7. Going concern

   During the nine months period ended September 30, 2025, the Group incurred net loss of $2,196 thousand. Additionally, as of September 30, 2025, the Group generated $38,027 thousand of accumulated deficit since inception. Moreover, and while the Company's generated positive cash flows from operating activities during the nine months period ended September 30, 2025, the Company expects its negative cash flows from operating activities to significantly increase in the foreseeable future due to increase in R&D and R&D related expenses to be incurred as a result of commencement of clinical trials. Management plans to address these conditions by raising additional funds and by generating larger volumes of revenues. However, there is no assurance that such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives, or that the Company will successfully generate sufficient revenues to meet its objectives. These conditions raise substantial doubts about the Company's ability to continue as a going concern. These unaudited condensed interim consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

8. Between February 2023 to December 2024, Innocan entered several amendments to the research and license agreement with Yissum Research Development Company of the Hebrew University of Jerusalem Ltd. ("Yissum"). As part of the amendments, Innocan agreed to finance additional research with the aim of meeting the U.S. Food and Drug Administration ("FDA") guidance on Liposome drug-products in a total amount of approximately $1,272 thousand, by December 2024 (the "December 2024 Goal"). The Company met the December 2024 Goal. The total expense due to research activity by Yissum incurred during the nine months period ended September 30, 2025, amounted to $41 thousand (nine months period ended September 30, 2024:

   $266).

9. On March 7, 2025, the Company closed a non-brokered private placement offering of a debenture unit (the "Debenture Unit") to its largest shareholder, Tamar Innovest, for gross proceeds of $1,000,000 (the "March 2025 Offering"). The Debenture Unit consists of: (a) one secured convertible debenture in the principal amount of $1,000,000 (the "Debenture") and (b) 85,470 common share purchase warrants (each, a "March 2025 Warrant"). The Debenture matures two years from the date of issuance (the "Maturity Date"), will bear interest at the rate of 10% per annum and is convertible into common shares prior to the Maturity Date at a price of CAD 13.65 (approximately $9.75) per share (based on a foreign exchange rate on the day prior to the date of conversion). Each March 2025 Warrant is exercisable into one common share at a price of CAD 16.90 (approximately $11.70) for a period of four years from the date of issuance. The March 2025 Warrant and the Debenture were accounted for as financial liabilities measured at fair value through profit or loss (see also note 11).

10. On April 15, 2025, the Company closed a non-brokered private placement offering of units (the "Units"), pursuant to which the Company issued 18,362 Units at a price of CAD 11.70 (approximately $7.94) per Unit (the "Offering Price") for aggregate gross proceeds of CAD 214,839 (approximately $156,684). Each Unit is comprised of one common share and one common share purchase warrant ("April 2025 Warrant"). Each April 2025 Warrant will entitle the holder thereof to purchase one common share at an exercise price of CAD 16.25 (approximately $11.05) for a period of four years from the date of issuance. The gross proceeds were first allocated to the April 2025 Warrants in the amount of $64 thousand with the residual balance of $93 allocated to the common shares (see also note 11).

11. The Trump Administration has recently imposed a series of tariffs on U.S. trading partners. On April 2, 2025, the President issued an Executive Order announcing a "baseline" reciprocal tariff of 10% on all U.S. trading partners effective April 5, 2025, and higher individualized reciprocal tariffs on 57 countries (with certain product exemptions for pharmaceutical-related products, among others). Previously, the administration had imposed tariffs equaling 20% on China.

    While the Group's first quarter 2025 financial results were not materially affected by these developments, its second and third quarters sales were negatively affected by negative consumer sentiment and economic uncertainty in the Group's market. If substantial tariffs remain in place, the Group may begin to see the effect of higher duties on restocking later this year. The likely short-term impact of the tariffs is difficult to predict with any certainty, however. The Group is actively evaluating its options and the impact of trade policy changes on future quarters remains uncertain.

12. On September 5, 2025, the Group's Board of Directors (the "Board") approved a 1-for-65 reverse share split of its issued and outstanding common shares, effective as of September 5, 2025, pursuant to which holders of the Company's common shares received 0.0154 of a common share for every one common share.

    All issued and outstanding common shares or instruments convertible into common shares contained in these financial statements have been retroactively adjusted to reflect the reverse share split for all periods presented, unless explicitly stated otherwise.

    NOTE 2 - MATERIAL ACCOUNTING POLICIES:

    The material accounting policies adopted in the preparation of the unaudited condensed interim consolidated financial statements are set out below. The policies have been consistently applied to all the periods presented, unless otherwise stated.

    Except as noted below, the Group has applied the same accounting policies and methods of computation in its unaudited condensed interim consolidated financial statements as in its 2024 annual financial statements.

    Basis of preparation

    The unaudited condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting". Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") have been condensed or omitted. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. These unaudited condensed interim consolidated financial statements were authorized for issue by the Board on November 26, 2025.

    Income taxes

    Current income tax is the expected tax expense, payable or receivable on taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous years

    Accounting standards issued but not yet effective

    There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.

    • IFRS 18 Presentation and Disclosures in Financial Statements

      IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements.

      IFRS 18 introduces new requirements to:

      1. present specified categories and defined subtotals in the statement of profit or loss

      2. provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements

      3. improve aggregation and disaggregation.

         An entity is required to apply IFRS 18 for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective when an entity applies IFRS 18. IFRS 18 requires retrospective application with specific transition provisions.

         The Group is currently assessing the impact of adopting IFRS 18 on the consolidated financial statements.

    • Amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" (regarding classification and measurement requirements of financial instruments and additional disclosure requirements):

      The main amendments to IFRS 9:

      1. Introducing a derecognition option for derecognizing a financial liability that is settled via an electronic payment system before the settlement date.

      2. Providing application guidance and illustrative examples on how an entity can assess whether the expected contractual cash flows of a financial asset reflect solely payments of principal and interest for the outstanding principal amount, for classifying the financial asset.

      3. Clarifying that a financial asset has non-recourse features if an entity's ultimate right to receive cash flows is contractually limited to the cash flows generated by specified assets.

      4. Clarifying the characteristics of contractually linked instruments that distinguish them from other transactions.

         The main amendments to IFRS 7:

         1. Updated disclosures requirements for investments in equity instruments designated at FVTOCI.

         2. Introducing additional disclosure requirements for financial instruments that include contractual terms that could change the timing or amount of contractual cash flows upon the occurrence (or non-occurrence) of a contingent event that does not relate directly to changes in risks and costs of a basic lending arrangements (such as the time value of money or credit risk).

         The amendments are effective for annual reporting periods beginning on or after January 1, 2026, and will be applied retrospectively. Early application is permitted if all the amendments are applied simultaneously or if the amendments applied are related only to the classification of financial assets. An entity is not required to restate prior periods to reflect the application of the amendments, but it may restate prior periods if, and only if, it is possible to do so without the use of hindsight.

         The Group expects that the adoptions of these amendments will not have a material impact on its consolidated financial statements and related disclosures.

    • Annual improvements to IFRS Accounting Standards (Volume 11):

      The following amendments were published by the IASB in July 2024, as part of its annual improvements process:

      1. Narrow-scope wording amendments to IFRS 1 "First-time Adoption of International Financial Reporting Standards", IFRS 10 "Consolidated Financial Statements" and IAS 7 "Statement of Cash Flows".

      2. Amendments to IFRS 9 "Financial Instruments", which clarify that when a lessee has determined that a lease liability has been extinguished in accordance with IFRS 9, the lessee is required to apply IFRS 9:3.3.3 and recognize any resulting gain or loss in profit or loss. It also clarifies that a receivable should be measured at initial recognition at an amount determined by applying IFRS 15, which might differ from the transaction price.

    The amendments are effective for annual reporting periods beginning on or after January 1, 2026. Early application of the amendments is permitted, and if an entity applies the amendments early, it must disclose this fact.

    The amendment to IFRS 9 regarding extinguished lease liabilities will be applied from the beginning of the annual reporting period in which the entity first applies that amendment.

    The Group expects that the adoptions of these amendments will not have a material impact on its consolidated financial statements and related disclosures.

    	As of September 30,	As of December 31,
    	2025	2024
    Tax authorities	362	286
    Prepaid expenses	54	67
    Receivables from online retailer	425	250
    Restricted deposits (*)	72	69
    Deferred offering costs	394	150
    Total	1,307	822

    (*) Deposits held as collateral for credit card lines, in accordance with bank requirements.

    NOTE 4 - OTHER CURRENT LIABILITIES:
    	As of September 30,	As of December 31,
    	2025	2024
    Accrued expenses	424	281
    Payroll and related liabilities	175	197
    Short term lease liability	-	10
    	599	488

    All issued and outstanding common shares contained in these financial statements have been retroactively adjusted to reflect the reverse share split for all periods presented. See note 1.12 above.

    Composition:

    Number of shares as of September 30, 2025 Issued and Authorized outstanding

    Common shares without nominal par value Unlimited 4,498,772

    Number of shares as of December 31, 2024 Issued and Authorized

    Common shares without nominal par value Unlimited

    outstanding (*)

    4,463,316

    Changes in the number of issued common shares from December 31, 2024 to September 30, 2025, are as follows:

    Number of Common Shares

    Balance as of January 1, 2025	4,463,316
    Vesting of restricted share units granted in March 2024 (3)	17,094
    Issuance of shares - April 2025 Private Placement (4)	18,362
    Balance as of September 30, 2025	4,498,772

    Changes in the number of issued common shares from December 31, 2023 to September 30, 2024, are as follows:

    Number of Common

    Shares(*)

    Balance as of January 31, 2024	4,123,106
    Issuance of shares - March 2024 Private Placement (1)	122,351
    Issuance of shares - August 2024 Private Placement (2)	122,351
    Issuance of restricted share units in March 2024 (3)	72,411
    Balance as of September 30, 2024	4,317,868

    (*) On September 5, 2025, the Company effected a 1-for-65 reverse share split of its issued and outstanding common shares, pursuant to which holders of the Company's common shares received 0.0154 of a common share for every one common share. All share amounts have been retroactively restated for all periods presented. See also note 1.12

    1. On March 14, 2024, the Company closed a non-brokered private placement offering of 122,351 units (the "March 2024 Units") at a price of CAD 16.25 per March 2024 Unit (approximately $12.35) for aggregate gross proceeds of CAD 1,989 thousand (approximately $1,475 thousand). Each March 2024 Unit is comprised of one common share and one warrant (a "March 2024 Warrant"). Each March 2024 Warrant entitles the holder thereof to purchase one common share at an exercise price of CAD 20.80 (approximately $15.60) for a period of four (4) years from the date of issuance. The gross proceeds were first allocated to the March 2024 Warrants in the amount of $1,103 thousand with the residual balance of

       $372 allocated to the common shares (see also note 11).

    2. On August 29, 2024, the Company closed a non-brokered private placement offering of 77,319 units (the "August 2024 Units") at a price of CAD 14.30 per August 2024 Unit (approximately $10.40) for aggregate gross proceeds of CAD 1,106 thousand (approximately $822 thousand). Each August 2024 Unit is comprised of one common share and one warrant (a "August 2024 Warrant"). Each August 2024 Warrant entitles the holder thereof to purchase one common share at an exercise price of CAD 20.80 (approximately $15.60) for a period of four (4) years from the date of issuance. The gross proceeds were first allocated to the August 2024 Warrants in the amount of $517 thousand with the residual balance of

       $305 allocated to the common shares (see also note 11).

    3. On March 14, 2024, the Company granted an aggregate of 109,854 restricted share units (each, an "RSU") to directors and officers. Each RSU entitles the recipient to receive one common share on vesting. A total of 75,666 RSUs vested on March 14, 2024, and remaining 34,188 RSUs vest as follows: (i) half on September 14, 2024; and (ii) half on March 14, 2025

    4. For equity transactions that occurred in 2025 see Note 1.10.

During the nine months period ended September 30, 2025, the Company granted the following restricted share units ("RSU"):

Grantee Date of grant Number of shares

Directors and officers (1)July 2, 2025 354,615

1. Each RSU entitles the recipient to receive one common share of the Company (a "Common Share") on vesting. The fair value of the RSUs was obtained using the share price of the Company on July 2, 2025, the date of grant, which was 14.30 CAD.

During the nine months period ended September 30, 2025, the Company recorded share based compensation expenses for RSUs grants of $1,405 thousand, which is included in selling, marketing and distribution expenses, research and development expenses or general and administrative expenses, based on the function of the grantee (nine months period ended September 30, 2024: $1,454).

During the nine months period ended September 30, 2025, the Company granted the following share options:

Grantee

Consultant (1)

July 2,

2025 14.625 30,000

August 27,

2030

1. Each of the share options is exercisable for one common share of the Company. All share options vested immediately upon grant.

   The fair value of the share options was obtained using the Black Scholes (1973) model on the date of the grant based on certain inputs, including:

   • The expected volatility of the share price is 70%

   • The dividend yield rate is 0%

   • The risk free interest rate is 2.9142%

   • The share price of the Company on July 2, 2025, was 14.30 CAD

During the nine months period ended September 30, 2025, the Company recorded share based compensation expenses for share options grants of $308 thousand, which is included in selling, marketing and distribution expenses, research and development expenses or general and administrative expenses, based on the function of the grantee (nine months period ended September 30, 2024: $301).

Activity in share options granted to employees and service providers is as follows:

(*) The weighted average remaining contractual life of the share options outstanding at the end of the period is approximately 28 months.

(*) All number of shares have been retroactively restated for all periods presented. See also note 1.12

(*) Revenues in United States are attributed to B.I. Sky.

(**) Innocan's revenues are through sales in Europe.

(*) includes online retailer fees (selling, logistics and handling costs).

(**) Share-based compensation for the nine months ended September 30, 2025, and 2024 was 406 and 360, respectively. For the three months ended September 30, 2025, and 2024, share-based compensation amounted to 397 and 13, respectively.

September 30, September 30,

(*) Share-based compensation for the nine months ended September 30, 2025, and 2024 was 129 and 43, respectively. For the three months ended September 30, 2025, and 2024, share-based compensation amounted to 143 and 25, respectively.

(**) Share-based compensation for the nine months ended September 30, 2025, and 2024 was 198 and 151, respectively. For the three months ended September 30, 2025, and 2024, share-based compensation amounted to 156 and 27, respectively.

September 30, September 30,

(*) Share-based compensation for the nine months ended September 30, 2025, and 2024 was 751 and 554, respectively. For the three months ended September 30, 2025, and 2024, share-based compensation amounted to 628 and 100, respectively.

(**) Share-based compensation for the nine months ended September 30, 2025, and 2024 was 235 and 691, respectively. For the three months ended September 30, 2025, and 2024, share-based compensation amounted to 271 and 56, respectively.

The Company accounts for warrants issued to investors and the convertible debenture under IFRS 9, Financial Instruments. Warrants issued to service providers are accounted for as equity-classified awards under IFRS 2, Share-based Payment.

The Company recorded the October 2021 Unit Warrants, February 2023 Unit Warrants, August 2023 Unit Warrants, October 2023 Unit Warrants, March 2024 Warrants, August 2024 Warrants, December 2024 Warrants, March 2025 Warrants and April 2025 Warrants as a derivative financial liability at the fair value of the warrants on the issuance date due to the fact that they do not meet the criteria for a fixed number of equity instruments in exchange for a fixed amount of cash since the exercise price is stated in CAD while the Company's functional currency is the USD. In addition, the Company recorded the convertible debenture as a derivative financial liability at fair value due to the fact that it does not meet the criteria for a fixed number of equity instruments in exchange for a fixed amount of cash since the exercise price is stated in CAD while the Company's functional currency is the USD.

The derivative financial liability and the convertible debenture are re-measured at each reporting date, with changes in fair value recognized in profit or loss. The carrying amounts represent fair value based on valuation performed by management with the assistance of an independent appraiser.

1. October 2021 Unit Warrants

   In connection with October 13, 2021 Private Placement, the Company issued 148,908 warrants to investors. Each October 2021 Unit Warrant entitles the holder thereof to acquire one common share at an exercise price of CAD 71.50 ($57.20) for a period of 60 months following October 13, 2021.

   The October 2021 Unit Warrants are transferable but are not listed or quoted on any stock exchange or market. The derivative financial liability as of issuance date amounted to $3,427 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $15 thousand and $39 thousand, respectively.

2. February 2023 Unit Warrants

   In connection with the private placement which closed on February 16, 2023, the Company issued 30,492 units to investors. Each February 2023 Unit consists of one (1) common share; one-half of one Class A warrant to purchase common shares ("February 2023 Class A Warrant"); and one-half of one Class B warrant to purchase common shares ("February 2023 Class B Warrant") (collectively each whole February 2023 Class A Warrant and each whole February 2023 Class B Warrant, a "February 2023 Warrant"). Each February 2023 Class A Warrant entitles the holder thereof to purchase one common share at a price of CAD 20.15 ($14.95) for a period of two (2) years from the date of issuance. Each February 2023 Class B Warrant entitles the holder thereof to purchase one common share at a price of CAD 28.60 ($21.45) for a period of three (3) years from the date of issuance.

   Following the date of issuance of the February 2023 Warrants, if the daily volume weighted average trading price of the common shares on the CSE for any period of 20 consecutive trading days equals or exceeds CAD

   40.30 ($29.90) in the case of a February 2023 Class A Warrant or CAD 85.80 ($63.70) in the case of a February 2023 Class B Warrant, the Company may, upon providing written notice to the holders of the February 2023 Warrants (the "Acceleration Notice"), accelerate the expiry date of the February 2023 Warrants to the date that is 30 days following the date of the Acceleration Notice. The derivative financial liability as of issuance date amounted to $154 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $4 thousand and

   $14 thousand, respectively.

3. August 2023 Unit Warrants

   In connection with the private placement which closed on August 3, 2023, the Company issued 129,381 units to investors. Each August 2023 Unit consists of: (i) one common share; (ii) one-half of one Class A common share purchase warrant (each whole Class A common share purchase warrant, a "August 2023 Class A Warrant"); and (iii) one-half of one Class B common share purchase warrant (each whole Class B common share purchase warrant, a "August 2023 Class B Warrant") (collectively each whole August 2023 Class A Warrant and each whole August 2023 Class B Warrant, a "August 2023 Warrant"). Each August 2023 Class A Warrant entitles the holder thereof to purchase one common share at a price of CAD 18.85 ($14.30) for a period of three

   (3) years from the date of issuance. Each August 2023 Class B Warrant entitles the holder thereof to purchase one common share at a price of CAD 26.00 ($19.50) for a period of five (5) years from the date of issuance. The derivative financial liability as of issuance date amounted to $692 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $389 thousand and $359 thousand, respectively.

4. October 2023 Unit Warrants

   In connection with October 12, 2023 and October 20, 2023 offerings, the Company issued 83,471 warrants (the "October 2023 Unit Warrants") to investors. Each October Unit Warrant entitled the holder therefore to acquire one common share at an exercise price of CAD 23.40 ($16.90) for a period of 36 months from the date of the closing. The derivative financial liability as of issuance date amounted to $538 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $152 thousand and $161 thousand, respectively.

5. March 2024 Warrants

   In connection with the private placement which closed on March 14, 2024, the Company issued 122,351 units to investors. Each March 2024 Unit entitles the holder thereof to acquire one common share at an exercise price of CAD 20.80 ($15.60) for a period of four years following March 15, 2024.

   The derivative financial liability as of issuance date amounted to $1,103 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $497 thousand and $427 thousand, respectively.

6. August 2024 Warrants

   In connection with the private placement which closed on August 29, 2024, the Company issued 77,319 units to investors. Each August 2024 Unit entitles the holder thereof to acquire one common share at an exercise price of CAD 20.80 ($15.60) for a period of four years following August 29, 2024.

   The derivative financial liability as of issuance date amounted to $517 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $415 thousand and $349 thousand, respectively.

7. December 2024 Warrants

   In connection with the private placement which closed on December 31, 2024, the Company issued 48,880 units to investors. Each December 2024 Unit entitles the holder thereof to acquire one common share at an exercise price of CAD 18.20 ($12.35) for a period of four years following December 31, 2024.

   The derivative financial liability as of issuance date amounted to $215 thousand. As of September 30, 2025 and December 31, 2024, it amounted to $257 thousand and $215 thousand, respectively.

8. March 2025 Warrants

   In connection with the private placement which closed on March 7, 2025, the Company issued 85,470 units to its largest shareholder, Tamar Innovest. Each March 2025 Unit entitles the holder thereof to acquire one common share at an exercise price of CAD 16.90 ($11.70) for a period of four years following March 7, 2025.

   The derivative financial liability as of the issuance date amounted to $360 thousand. As of September 30, 2025, it amounted to $482 thousand.

9. April 2025 Warrants

   In connection with the private placement which closed on April 15, 2025, the Company issued 18,362 units to investors. Each April 2025 Unit entitles the holder thereof to acquire one common share at an exercise price of CAD 16.25 ($11.05) for a period of four years following April 15, 2025.

   The derivative financial liability as of issuance date amounted to $64 thousand. As of September 30, 2025, it amounted to $107 thousand.

   The fair value measurements of the warrants as of September 30, 2025 were measured using:

   1. For the warrants containing no accelerated exercise provisions, the Black-Scholes model.

   2. The warrants containing accelerated exercise provisions, as described in note 11.2 above, were estimated using a binomial lattice model, under the assumption that once the price per share exceeds the defined threshold, the warrants become immediately exercisable.

      The key inputs that were used in measuring the fair value of the warrants as of September 30, 2025 were: average risk-free interest rate - 2.42%, average expected volatility - 70%, year-end expected dividend yield - 0 and share price of the Company as of September 30, 2025 - CAD 16.20 ($11.66).

10. Convertible debenture

In connection with the private placement which closed on March 7, 2025, as discussed in note 1.9 above, the fair value of the Debenture as of the issuance date amounted to $640 thousand. As of September 30, 2025, it amounted to $1,523 thousand.

The fair value measurements of the Debenture as of September 30, 2025 were measured using the binomial model.

The key inputs that were used in measuring the fair value of the Debenture as of September 30, 2025 were: average risk-free interest rate -3.62%, average expected volatility - 65%, expected dividend yield -0 and share price of the Company as of September 30, 2025 - CAD 16.20 ($11.66).

The following table sets out the Company's liabilities that are measured and recognized at fair value in the financial statements:

The changes in derivative warrant liabilities for the nine months period ended September 30, 2025, are as follows:

The changes in the convertible debenture as of September 30, 2025 are as follows:

debenture

March 2025 Warrants 640

Changes in fair value 883

Warrants accounted for under IFRS 2 are as follows:

Warrants outstanding at beginning of period 7,031 20.345

Warrants outstanding at end of period 7,031 20.345 Exercisable warrants 7,031 20.345

of warrants

exercise price (CAD)

Warrants outstanding at beginning of period 5,993 20.735

Warrants outstanding at end of period 5,993 20.735 Exercisable warrants 5,993 20.735

(*) All number of shares have been retroactively restated for all periods presented. See also note 1.12

The Group has two segments:

1. Online sales - Sky Global operations, which engages in the development, manufacture and marketing of cosmetic products.

2. Other operations - the development of CBD-LPT as well as the development and marketing of self-care products.

The Group's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technology and marketing strategies.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker is the Company's CEO.

The CODM evaluates the Company's performance and allocates resources based on net profit (loss).