TEL AVIV - SciSparc Ltd. (NASDAQ:SPRC), a clinical-stage pharmaceutical company, announced today its intent to spin off its advanced clinical stage pharmaceutical portfolio and equity stake in SciSparc Nutraceuticals Inc. into Miza III Ventures Inc. (TSXV:MIZA.P). The non-binding letter of intent outlines a transaction that would see SciSparc transferring its assets to Miza in exchange for a controlling interest.
The deal, which is yet to be finalized, values SciSparc's assets at approximately $11.6 million and Miza's enterprise value at about $3.3 million, including its $1 million cash position.
Upon completion, SciSparc would receive 63,300,000 common shares of Miza and up to 48,000,000 contingent rights, subject to achieving certain milestones. This would result in SciSparc holding between approximately 75% to 84.53% of the combined entity, depending on the definitive terms to be agreed upon.
SciSparc's portfolio includes SCI-110 for Tourette syndrome, currently in phase IIb trials; SCI-110 for Alzheimer’s disease, with completed phase II trials; and SCI-210 for autism, which began a placebo-controlled trial in early 2024. The transaction follows SciSparc's strategy to enhance shareholder value and comes after its merger with AutoMax Motors Ltd., announced on April 11, 2024.
The prospective arrangement would position the resulting entity to operate in both pharmaceutical and supplement sectors. However, the company cautions that there is no guarantee that a definitive agreement will be reached or that the proposed transaction will create shareholder value. The company's statements about the potential deal are forward-looking and subject to various risks and uncertainties.
This news is based on a press release statement from SciSparc Ltd.
In other recent news, SciSparc Ltd. has made significant strides in its operations. The clinical-stage pharmaceutical company has secured a European patent for its innovative "Compositions and Methods of Potentiating Antimicrobials," a move that builds on its strategy to enhance its intellectual property portfolio worldwide.
This patent, which aligns with a similar one issued by the United States Patent and Trademark Office, covers pharmaceutical compositions that combine antibiotics with cannabinoids to improve the effectiveness of antimicrobials and lessen their side effects.
In another development, SciSparc has announced a strategic merger with AutoMax Motors Ltd., a prominent vehicle importer in Israel. This merger is expected to result in a new combined entity, with SciSparc shareholders owning approximately 50.01% and AutoMax equity holders owning around 49.99% of the resulting company's share capital. Both these developments are recent and underline SciSparc's commitment to growth and innovation.
It's worth noting that these advancements follow the company's active pursuit of patent grants in key markets such as the United States, Europe, Japan, Australia, and Israel, reflecting its dedication to protecting its core technologies. These recent developments provide a glimpse into SciSparc's ongoing efforts to strengthen its position in the global market.
InvestingPro Insights
As SciSparc Ltd. (NASDAQ:SPRC) navigates through its strategic maneuvers, including the potential spin-off into Miza III Ventures Inc., investors are closely monitoring the company's financial health and market performance. According to InvestingPro data, SciSparc's market capitalization stands at a modest $2.33 million, reflecting the scale of this clinical-stage pharmaceutical company. Investors considering this stock should note that the company's price-to-book ratio as of the last twelve months ending Q4 2023 is 0.31, which could suggest that the company's assets are potentially undervalued by the market.
However, the company's financials reveal challenges, with a reported revenue growth of -32.67% in Q4 2023 on a quarterly basis. This contraction in revenue, alongside an operating income margin of -200.52% for the same period, underscores the operational difficulties SciSparc has been facing. Additionally, the stock's price has experienced a significant decline over the past year with a -94.74% return, trading near its 52-week low and indicating a bearish trend in investor sentiment.
Amidst these financial metrics, InvestingPro Tips highlight that SciSparc holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations, which may provide some financial flexibility in the short term. However, the company is also quickly burning through cash and has been flagged as not profitable over the last twelve months, adding layers of risk to the investment profile.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights, including 13 more InvestingPro Tips for SciSparc Ltd. To access these valuable tips and enhance your investment strategy, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
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