SciSparc: AutoMax Announces $13 Million First Delivery of JAC Vehicles Following Regulatory Approval for Direct Importation

Rhea-AI Summary

SciSparc (Nasdaq: SPRC) announced that AutoMax Motors, a company with which it has a pending merger agreement, received its first $13 million shipment of JAC Motors vehicles following regulatory approval for direct importation in Israel. This milestone comes after AutoMax signed distribution agreements with JAC Motors earlier in 2024. SciSparc provided financial support to AutoMax to facilitate the JAC Motors transaction. The merger agreement between SciSparc and AutoMax, signed in April 2024, would enable SciSparc's expansion into the automotive sector, subject to shareholder approval from both companies.

Positive

• Secured $13 million first vehicle delivery from JAC Motors
• Obtained regulatory approval for direct vehicle importation in Israel
• Strategic expansion into automotive sector through pending AutoMax merger

Negative

• Merger completion contingent on shareholder approvals
• Significant financial commitment in supporting AutoMax operations

Insights

Automotive Industry Analyst

The $13 million JAC Motors vehicle shipment to AutoMax represents a strategic pivot in Israel's automotive market dynamics. The direct importation approval is particularly noteworthy as it eliminates intermediary costs and enhances profit margins. JAC Motors' entry through AutoMax creates a new competitive force in Israel's automotive sector, where Chinese manufacturers have been gaining market share from traditional players.

The vertical integration strategy through the pending merger with SciSparc could potentially streamline operations and create cost synergies. AutoMax's direct import status for JAC vehicles provides a significant competitive advantage, potentially allowing for more aggressive pricing strategies while maintaining healthy margins. This development could reshape the competitive landscape of Israel's auto import market, traditionally dominated by established European and Asian brands.

The timing is strategic, coinciding with growing acceptance of Chinese automotive brands globally and increasing demand for affordable vehicle options in Israel. This positions AutoMax favorably in the value segment of the market, with potential for significant market share gains.

Financial Analyst

The $13 million initial delivery represents a tangible milestone in SciSparc's transformation strategy. This development carries multiple financial implications: immediate revenue generation potential, enhanced market positioning and validation of the strategic pivot into automotive operations. The direct import approval significantly improves the business model's economics by eliminating middleman costs.

For SciSparc shareholders, this represents a material shift from the company's historical focus, potentially offering new growth vectors and revenue streams. The successful execution of the JAC Motors agreement demonstrates management's ability to implement its strategic vision and suggests potential for value creation through the pending merger. However, investors should note that the merger's completion remains subject to shareholder approval and other closing conditions.

The financial support provided to AutoMax appears to have been strategically deployed, facilitating a transaction that could generate substantial returns through AutoMax's enhanced market position and improved operational efficiency.

TEL AVIV, Israel, Dec. 26, 2024 (GLOBE NEWSWIRE) -- SciSparc Ltd. (Nasdaq: SPRC) ("Company" or "SciSparc"), announced that AutoMax Motors Ltd., (“AutoMax”), a leading automotive importer and distributor in Israel with which the Company has entered into an agreement and plan of merger, received its first shipment of vehicles manufactured by Anhui Jianghuai Automobile Group Co., Ltd. (“JAC Motors”), a globally recognized Chinese automotive company. This marks a significant milestone in AutoMax’s direct import and distribution operations, launched under agreements signed earlier this year with JAC Motors.

The shipment follows regulatory approvals for direct importation and positions AutoMax to begin marketing and sales activities for JAC Motors vehicles across Israel.

SciSparc has provided financial support to AutoMax, which SciSparc believes helped provide AutoMax with resources to facilitate the transaction with JAC Motors. Further, as part of its growth strategy, AutoMax entered into a merger agreement with the Company in April 2024, that if completed would pave the way for SciSparc’s expansion into the automotive sector. The merger is subject to closing conditions, including the approval of the shareholders of each of the Company and AutoMax.

About SciSparc Ltd. (Nasdaq: SPRC):

SciSparc Ltd. is a specialty clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists. SciSparc’s focus is on creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the Company is currently engaged in the following drug development programs based on THC and/or non-psychoactive cannabidiol: SCI-110 for the treatment of Tourette Syndrome, for the treatment of Alzheimer's disease and agitation; and SCI-210 for the treatment of autism and status epilepticus. The Company also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seeds’ oil-based products on the Amazon.com Marketplace.

Additional Information and Where You Can Find It

In connection with the proposed transaction between the Company and AutoMax, the Company has filed a preliminary registration statement, which includes a preliminary proxy statement/prospectus, with the Securities and Exchange Commission (the “SEC”). This press release is not a substitute for the registration statement, the proxy statement/prospectus or any other documents that the Company may file with the SEC or send to its shareholders in connection with the proposed transactions. Before making any voting decision, investors and securityholders are urged to read the final registration statement or the proxy statement/prospectus, as applicable, and all other relevant documents filed or furnished or that will be filed with or furnished to the SEC in connection with the proposed transaction as they become available because they will contain important information about the proposed transaction and related matters.

You may obtain free copies of the proxy statement/prospectus and all other documents filed or that will be filed with the SEC regarding the proposed transaction at the website maintained by the SEC at www.sec.gov. Once filed, the final proxy statement/prospectus will be available free of charge on the Company’s website at https://investor.scisparc.com/, by contacting the Company’s Investor Relations at IR@scisparc.com or by phone at +972-3-6167055.

Participants in Solicitation

The Company, AutoMax and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of the Company’s Ordinary Shares in connection with the proposed transaction. Information about the Company’s directors and executive officers is set forth in the Company’s annual report on Form 20-F, for the year ended December 31, 2023, filed with the SEC on April 1, 2024. Other information regarding the interests of such individuals, as well as information regarding AutoMax’s directors and executive officers and other persons who may be deemed participants in the proposed transaction, will be set forth in the final proxy statement/prospectus, which will be filed with the SEC. You may obtain free copies of these documents as described in the preceding paragraph.

Non-Solicitation

This press release will not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. For example, SciSparc is using forward-looking statements when it discusses AutoMax’s growth strategy and that the merger potentially might pave the way for SciSparc’s expansion into the automotive sector. Since such statements deal with future events and are based on SciSparc’s current expectations, they are subject to various risks and uncertainties related to the Company’s ability to complete the merger on the proposed terms and schedule, including risks and uncertainties related to the satisfaction of the closing conditions related to the Merger Agreement and risks and uncertainties related to the failure to timely, or at all, obtain shareholder approval for the transaction, and actual results, performance or achievements of SciSparc could differ materially from those described in or implied by the statements in this press release. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including those discussed under the heading "Risk Factors" in SciSparc's Annual Report on Form 20-F filed with the SEC on April 1, 2024, and in subsequent filings with the SEC. Except as otherwise required by law, SciSparc disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date they were made, whether as a result of new information, future events or circumstances or otherwise.

Investor Contact:
IR@scisparc.com
Tel: +972-3-6167055

FAQ

What is the value of AutoMax's first JAC Motors vehicle delivery to Israel?

The first delivery of JAC Motors vehicles to AutoMax in Israel is valued at $13 million.

When did SciSparc (SPRC) announce its merger agreement with AutoMax?

SciSparc announced its merger agreement with AutoMax in April 2024.

What regulatory approval did AutoMax receive for JAC Motors vehicles?

AutoMax received regulatory approval for direct importation of JAC Motors vehicles into Israel.

How will the AutoMax merger affect SciSparc's (SPRC) business?

The merger would enable SciSparc's expansion into the automotive sector, pending shareholder approval from both companies.

What role did SciSparc (SPRC) play in AutoMax's JAC Motors deal?

SciSparc provided financial support to AutoMax, which helped facilitate the transaction with JAC Motors.