SciSparc Provides Updates on Status of Spin-off of its Advanced Clinical Stage Pharmaceutical Portfolio to a Publicly Traded Company

Rhea-AI Summary

SciSparc (Nasdaq: SPRC) has signed an amendment to its non-binding letter of intent (LOI) to spin off its pharmaceutical portfolio through a reverse merger with Miza III Ventures Inc. (TSXV: MIZA.P). The deal values SciSparc's pharmaceutical assets at approximately US$11.6 million, while Miza's enterprise value is set at US$3.3 million.

The deadline for finalizing the definitive agreement has been extended to March 31, 2025, with transaction closing targeted for April 30, 2025. SciSparc would receive 63,300,000 Miza common shares and up to 48,000,000 contingent rights, resulting in a controlling stake of 75-84.53% in the merged entity.

The portfolio includes clinical trials for SCI-110 (Tourette syndrome and Alzheimer's) and SCI-210 (autism).

Positive

• Pharmaceutical assets valued at US$11.6 million in the spin-off deal
• Company to maintain controlling stake (75-84.53%) in the merged entity
• Multiple clinical-stage assets in the portfolio with ongoing trials

Negative

• Extended timeline for deal completion (from October 2024 to April 2025)
• LOI remains non-binding, subject to definitive agreement
• Deal consideration includes contingent rights based on undisclosed milestones

Insights

Financial Analyst

The proposed spin-off transaction values SciSparc's pharmaceutical assets at $11.6 million, with the company set to receive 63.3M common shares and up to 48M contingent rights in Miza. This strategic move would result in SciSparc maintaining a significant controlling interest of 75% to 84.53% in the merged entity. The deal structure, involving Miza's $3.3 million enterprise value (including $1.0 million cash), appears to be a calculated step to unlock shareholder value while maintaining control over the pharmaceutical portfolio. The extended timeline to March 2025 for definitive agreement suggests careful due diligence and negotiation process. This transaction, combined with the previously announced AutoMax Motors merger plan, indicates an active corporate restructuring strategy to optimize asset value and market positioning.

Medical Research Analyst

The pharmaceutical portfolio being spun off includes valuable late-stage clinical assets targeting significant market opportunities. The phase IIb trial for Tourette syndrome, completed phase II trial for Alzheimer's disease and ongoing placebo-controlled trial for autism represent a diverse and advanced pipeline. These neurological conditions represent substantial unmet medical needs with significant market potential. The spin-off could potentially accelerate the development of these promising candidates by creating a focused entity with dedicated resources. The structure maintains SciSparc's significant control while potentially providing better visibility and valuation for these clinical-stage assets in the public markets.

According to the LOI, SciSparc’s pharmaceuticals assets are valued at approximately US$11.6 million

TEL AVIV, Israel, Dec. 16, 2024 (GLOBE NEWSWIRE) -- SciSparc Ltd. (Nasdaq: SPRC) (“Company” or “SciSparc”), a specialty clinical-stage pharmaceutical company focusing on the development of therapies to treat disorders and rare diseases of the central nervous system, announced today that it had signed an amendment to its non-binding letter of intent (the “LOI”) to spin off by reverse merger its advanced clinical stage pharmaceutical portfolio and its equity stake in SciSparc Nutraceuticals Inc. (collectively, the “Target Assets”) to Miza III Ventures Inc. (“Miza”) (TSXV: MIZA.P), a publicly traded company on the Toronto Stock Exchange Venture in Canada, as previously announced on July 8, 2024.

Pursuant to the amendment to the LOI, the Company and Miza shall negotiate in good faith and use reasonable commercial efforts to enter into a definitive agreement by no later than March 31, 2025, which was extended from July 31, 2024, provided that such date may be extended by mutual written agreement of the parties, and to close the proposed transaction by no later than April 30, 2025, which was extended from October 31, 2024.

The LOI references a proposed asset and share purchase agreement (the “Agreement”) to be determined and negotiated between the Company and Miza, that will be based on an approximate US$ 3.3 million (C$ 4.5 million) total enterprise value of Miza, including its US$ 1.0 million cash position, and an approximate US$ 11.6 million (C$ 15.8 million) value of SciSparc’s assets.

Pursuant to the LOI, SciSparc would sell, assign, convey and transfer to Miza the Target Assets in consideration for 63,300,000 common shares of Miza and up to 48,000,000 Miza contingent rights based on pre-determined milestones. Following the closing of such transaction, SciSparc would hold a controlling interest in Miza, the exact percentage of which is contingent on agreeing definitive terms between the parties. The resulting entity, of which SciSparc would hold an equity stake ranging from a minimum of approximately 75% to a maximum of 84.53%, would be active in both the pharmaceutical and supplement sectors.

Such Agreement, if it were to be finalized and completed, would align with SciSparc's strategy of creating value for its shareholders and follows the announcement of the proposed plan of merger agreement and transaction relating to AutoMax Motors Ltd., as previously announced by SciSparc on April 11, 2024.

SciSparc’s pharmaceutical portfolio includes SCI-110 for treating persons with Tourette syndrome, which is subject to a phase IIb clinical trial, SCI-110 for treating persons with Alzheimer’s disease, the phase II clinical trial of which has been completed, and SCI-210 for treating children with autism, subject to a randomized, double-blind and placebo-controlled trial that commenced in the first quarter of 2024.

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 CBD: SCI-110 for the treatment of Tourette syndrome, for the treatment of Alzheimer's disease and agitation; SCI-160 for the treatment of pain; and SCI- 210 for the treatment of ASD and status epilepticus. The Company also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seed oil-based products on the Amazon.com Marketplace.

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 uses forward-looking statements when it discusses the extension of the date to prospectively enter into a definitive agreement between the parties, the terms of the LOI and the prospective Agreement, and the belief that the Agreement would align with SciSparc's strategy of creating value for its shareholders. The Company may not enter into or complete a definitive agreement for the proposed transaction with Miza or, even if it does, it may not create shareholder value. Because such statements deal with future events and are based on SciSparc's current expectations, they are subject to various risks and uncertainties 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, as amended, filed with the SEC on April 1, 2024, and in subsequent filings with the U.S. Securities and Exchange Commission. 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 SciSparc's pharmaceutical assets in the Miza spin-off deal?

SciSparc's pharmaceutical assets are valued at approximately US$11.6 million (C$15.8 million) in the proposed spin-off deal with Miza III Ventures.

What percentage of Miza will SPRC own after the spin-off completion?

After the transaction, SciSparc will hold a controlling interest in Miza ranging from approximately 75% to 84.53%.

When is the new deadline for completing the SPRC-Miza merger?

The deadline for completing the merger has been extended to April 30, 2025, with the definitive agreement to be finalized by March 31, 2025.

What clinical trials are included in SPRC's pharmaceutical portfolio?

The portfolio includes SCI-110 for Tourette syndrome (phase IIb), SCI-110 for Alzheimer's disease (completed phase II), and SCI-210 for autism (ongoing randomized trial).

How many Miza shares will SPRC receive in the spin-off transaction?

SciSparc will receive 63,300,000 common shares of Miza and up to 48,000,000 contingent rights based on pre-determined milestones.