SciSparc provides $2 million loan to AutoMax for expansion

TEL AVIV - SciSparc Ltd. (NASDAQ:SPRC), a clinical-stage pharmaceutical company with a market capitalization of $1.33 million, has announced a $2 million loan agreement with AutoMax Motors Ltd. to support the latter’s business expansion, particularly its direct import of JAC electric vehicles. This loan follows previous bridge loans totaling $4.25 million. According to InvestingPro data, the company’s stock has seen significant volatility, declining over 90% in the past year.

The loan carries an 8% annual interest rate, repayable in monthly installments of $50,000 plus interest. AutoMax has the option for early repayment without penalties. Upon completion of the merger agreement between the two companies, the interest on the loan will be cancelled, and AutoMax will continue to pay the principal amount. As security, AutoMax has pledged a first-ranking fixed charge on its subsidiary’s shares. InvestingPro analysis shows SciSparc maintains more cash than debt on its balance sheet, with a current ratio of 1.86.

In April 2024, SciSparc and AutoMax entered into a merger agreement under which SciSparc will acquire 100% of AutoMax, subject to customary closing conditions, including approvals from both companies’ shareholders. This move signals SciSparc’s strategic expansion into the automotive sector.

SciSparc specializes in developing treatments for central nervous system disorders, with a portfolio that includes cannabinoid-based pharmaceuticals targeting conditions such as Tourette Syndrome, Alzheimer’s disease, pain, autism spectrum disorder, and status epilepticus. The company also controls a subsidiary selling hemp seed oil products on Amazon (NASDAQ:AMZN) Marketplace. Financial data from InvestingPro indicates the company generated $1.75 million in revenue over the last twelve months, with a gross profit margin of 69%. InvestingPro’s Financial Health Score rates the company as ’FAIR’, with analysts expecting profitability improvement this year.

The proposed merger and financial support from SciSparc to AutoMax are forward-looking statements, subject to risks and uncertainties. These include the companies’ ability to complete the merger and meet closing conditions, as well as obtaining necessary shareholder approvals. The details of the merger will be outlined in a proxy statement/prospectus filed with the SEC, available for investors to review. For deeper insights into SciSparc’s valuation and 16 additional exclusive ProTips, investors can access comprehensive analysis through InvestingPro.

This information is based on a press release statement from SciSparc Ltd.

In other recent news, N2OFF, Inc. has announced a definitive agreement to acquire MitoCareX Bio Ltd., a biotech company specializing in cancer therapeutics. The acquisition involves a securities purchase and exchange agreement, granting N2OFF full ownership of MitoCareX, subject to stockholder approval. N2OFF will purchase shares from SciSparc Ltd. for $700,000 and issue additional common stock to all sellers, with the potential for milestone-based issuances. This strategic move aims to integrate MitoCareX’s biotech expertise with N2OFF’s focus on clean technology. Meanwhile, SciSparc Ltd. has reported that its partner, AutoMax Motors Ltd., has received its first shipment of vehicles from JAC Motors, marking a significant step in introducing JAC Motors’ electric vehicles to the Israeli market. This development follows a merger agreement between SciSparc and AutoMax, which is expected to expand SciSparc’s operations into the automotive sector upon completion. Both companies are awaiting shareholder approval to finalize the respective transactions.

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