NOTE 16 - Financial Instruments and Risk Management:

The Company holds the following financial instruments:

(*) Financial instruments that are included in other accounts receivable are deposits (Note 5)

(**) Payable amounts of Liability for Agricultural Research Organization are also presented in other accounts payable and therefore reclassed only for the purposes of this note (Note 11)

The Company is exposed to a variety of financial risks, which results from its financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures to these financial risks to limit any negative impact on the Company's financial performance and position. The Company's financial instruments are its cash, cash equivalents and restricted cash, trade and other accounts receivable, trade and other accounts payable, loans, accrued liabilities, liability for Agricultural Research Organization and lease liabilities. The main purpose of these financial instruments is to raise finance for the Company's operation. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from the Company's financial instruments are mainly currency risk and liquidity risk. The Company has no interest rate risk as the balances exposure to interest is minimal. The risk management policies employed by the Company to manage these risks are discussed below.

a.Foreign currency risk: 

Foreign exchange risk arises when the Company enters into transactions denominated in a currency other than its functional currency. The Company is exposed to currency risk to the extent that there is a mismatch between the currency in which it

is denominated and the respective functional currency of the company. The currencies in which some transactions are primarily denominated are CAD, USD and NIS.

The company's policy is not to enter into any economic hedging transactions to neutralize the effects of foreign currency fluctuations. The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

Analysis:

A 5% appreciation of the USD against the following currencies would have increased (decreased) Shareholders’ Equity  and the Loss and Other Comprehensive Loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

For a 5% depreciation of the USD against the relevant currency, there would be an equal and opposite impact on the Shareholders’ Equity and the Loss and Other Comprehensive Loss.

b.Liquidity risks: 

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability but can also increase the risk of loss. The Company has procedures with the object of minimizing such loss by maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities and the liability. The Company has no material obligation beyond one year except for loans, lease liabilities, liability for Agricultural Research Organization and cash in bank to finance its working capital in the near future.

The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the repayment forecast of the management of the company.

(*) Payable amounts of Liability for Agricultural Research Organization are also presented in other accounts payable and therefore reclassed only for the purposes of this note (Note 11)

c.Fair value of financial assets and liabilities: 

The fair value of the Company's current financial assets and liabilities approximates their carrying amounts as their maturity date is less than 1 year and they do not bear a fixed interest rate.

Reconciliation of fair value measurements that are categorized within Level 3 of the fair value hierarchy:

d.Financial instruments not measured at fair value: 

Financial instruments not measured at fair value include cash and cash equivalents, restricted cash, trade and other accounts receivable, trade and other accounts payable, liability for Agricultural Research Organization, loans and lease liabilities. Due to their short-term nature, the carrying value of cash and cash equivalents, restricted cash, trade and other accounts receivable, trade and other accounts payable and loans approximate their fair value.

The fair value of Liability to Agricultural Research Organization for December 31, 2025, and December 31, 2024, is not materially different to the carrying amount, since the interest rate used in the initial recognition is close to current market rates.

e.Capital management: 

The Company seeks to maintain a capital structure which enables it to continue as a going concern. The Company's capital is provided by equity rising. The Company manages its capital structure through raising funds from shareholders. The Company has net cash and cash equivalents as of December 31, 2025, of $23,025 (2024 – $2,390). The Company has a history of operating losses and continues to require additional funding to support its planned activities. These conditions, together with the uncertainty regarding the timing and availability of additional financing, represent factors that raise substantial doubt about the Company’s ability to continue as a going concern.