Full Press Release Details
CONDENSED COMBINED FINANCIAL INFORMATION
As previously disclosed, on April 10, 2024, SciSparc Ltd., or the Parent
Company or SciSparc entered into an Agreement and Plan of Merger with AutoMax Motors Ltd., an Israeli company traded on the TASE and the
leading parallel importer and distributor of vehicles in Israel, or AutoMax, and SciSparc Merger Sub Ltd., an Israeli limited company
and wholly owned subsidiary of SciSparc, or the Merger Agreement. On August 14, 2024 and on November 26, 2024, the parties entered into
addendums to the Merger Agreement, or the Merger Agreement Addendums. Upon the terms and subject to the satisfaction of the conditions
described in the Merger Agreement and the Merger Agreement Addendums, SciSparc Merger Sub Ltd. will be merged with and into AutoMax, with
AutoMax surviving the merger as a wholly-owned subsidiary of the Parent Company, or the Merger.
unaudited pro forma condensed combined statement of financial position is based on the individual historical balance sheet of the
Parent Company and AutoMax, prepared in accordance with IFRS as of June 30, 2024, and has been prepared to reflect the effect
of the acquisition as if it had occurred on June 30, 2024. The unaudited pro forma condensed combined statement of comprehensive
loss for the six months period ended June 30, 2024, gives effect to the acquisition as if it had occurred on January 1, 2024, the
beginning of the Parent Company's fiscal year. The historical condensed combined financial information has been adjusted to
give effect to pro forma events that are: 1) directly attributable to the acquisition; 2) factually supportable; and 3) with respect
to the statement of comprehensive loss, expected to have a continuing impact on the combined results. The unaudited pro forma
financial statements were prepared in accordance with Article 11 of U.S. Securities and Exchange Commission Regulation S-X. In the
opinion of management, all adjustments necessary to present fairly the unaudited pro forma condensed combined financial information
have been made, as further described in the accompanying notes.
unaudited pro forma condensed combined financial information is derived from and should be read in conjunction with the Parent Company's
historical unaudited financial statements for the six months period ended June 30, 2024, included as Exhibit 99.1 to the Report of Foreign
Private Issuer on Form 6-K furnished by SciSparc on November 4, 2024, and the historical audited financial statements of AutoMax
included as Exhibit 99.2 in this Report of Foreign Private Issuer on Form 6-K.
Estimated consideration of approximately $2.33 million is based on
the Parent Company's 30 days average closing share price of $0.237 between October 14, 2024, and November 22, 2024. The value of
purchase price consideration will change based on fluctuations in the share price of the Parent Company's ordinary shares and the
number of ordinary shares of the Parent Company's outstanding share capital on the closing date.
allocation of the purchase price as reflected in the unaudited pro forma condensed combined financial information was based on a preliminary
valuation of the assets acquired and liabilities assumed, and the accounting is subject to revision as more detailed analyses are completed
and additional information about the fair value of assets acquired and liabilities assumed becomes available.
The unaudited pro forma combined
condensed financial statements are presented for informational purposes only and are not necessarily indicative of the results of operations
that would have resulted had the transaction described above been consummated at the dates indicated, nor are they necessarily indicative
of the results of operations which may be realized in the future. Furthermore, the unaudited pro forma combined condensed financial statements
do not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings
or expenses that may be associated with the integration of the two companies.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF FINANCIAL POSITION
(U.S. dollars in thousands)
| SciSparc Ltd. | AutoMax Motors Ltd. | Transaction Accounting Adjustments | Pro Forma | |||||||||||||||
| Assets | ||||||||||||||||||
| Current Assets: | ||||||||||||||||||
| Cash | $ | 252 | $ | 375 | $ | (450 | ) | 4(b) | $ | 177 | ||||||||
| Restricted deposit | 64 | - | - | 64 | ||||||||||||||
| Short-term deposit | 2,308 | - | - | 2,308 | ||||||||||||||
| Trade receivables | 19 | 4,269 | - | 4,288 | ||||||||||||||
| Other accounts receivable | 298 | 18,528 | - | 18,826 | ||||||||||||||
| Inventory | 415 | 44,531 | - | 44,946 | ||||||||||||||
| Total Current Assets | 3,356 | 67,703 | (450 | ) | 70,609 | |||||||||||||
| Non-current assets: | ||||||||||||||||||
| Long term bank deposits | - | 326 | - | 326 | ||||||||||||||
| Intangible asset, net | 3,006 | 2,556 | - | 5,562 | ||||||||||||||
| Deferred taxes | - | 601 | - | 601 | ||||||||||||||
| Investments in company accounted for at equity | 1,196 | 3,136 | - | 4,332 | ||||||||||||||
| Long term investments | 2,448 | 2,872 | (2,448 | ) | 4(e) | 2,872 | ||||||||||||
| Long term prepaid expenses | - | 83 | - | 83 | ||||||||||||||
| Investments in financial assets | 403 | 45 | (283 | ) | 4(f) | 165 | ||||||||||||
| Property and equipment, net | 73 | 6,775 | - | 6,848 | ||||||||||||||
| Total Non-current Assets | 7,126 | 16,394 | (2,731 | ) | 20,789 | |||||||||||||
| Total Assets | $ | 10,482 | 84,097 | (3,181 | ) | 91,398 | ||||||||||||
| Liabilities | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Trade payables | $ | 1,164 | $ | 3,440 | $ | - | $ | 4,604 | ||||||||||
| Short term loans | - | 40,847 | (2,443 | ) | 4(e) | 38,404 | ||||||||||||
| Other accounts payable | 253 | 12,055 | - | 12,308 | ||||||||||||||
| Warrants | 345 | 3,823 | - | 4,168 | ||||||||||||||
| Lease liability | 38 | 1,491 | - | 1,529 | ||||||||||||||
| Total Current liabilities | 1,800 | 61,656 | (2,443 | ) | 61,013 | |||||||||||||
| Non-current liabilities: | ||||||||||||||||||
| Lease liability | 26 | 3,665 | - | 3,691 | ||||||||||||||
| Long term loans | - | 3,515 | - | 3,515 | ||||||||||||||
| Loans from related parties | - | 269 | - | 269 | ||||||||||||||
| Tax liability | - | 189 | - | 189 | ||||||||||||||
| Warrants Liability | - | 5,380 | - | 5,380 | ||||||||||||||
| Employees | - | 37 | - | 37 | ||||||||||||||
| Total Current liabilities | 26 | 13,054 | - | 13,080 | ||||||||||||||
| Total Liabilities | $ | 1,826 | 74,710 | (2,443 | ) | 74,093 | ||||||||||||
| Shareholders' Equity: | ||||||||||||||||||
| Share capital and premium | $ | 67,258 | $ | 22,254 | $ | (7,058 | ) | 4(a) | $ | 82,454 | ||||||||
| Reserve from share-based payment transactions | 5,298 | 5,346 | - | 10,644 | ||||||||||||||
| Warrants | 5,190 | 491 | - | 5,681 | ||||||||||||||
| Foreign currency translation reserve | 497 | (83 | ) | - | 414 | |||||||||||||
| Transactions with non-controlling interests | 810 | - | - | 810 | ||||||||||||||
| Accumulated deficit | (72,134 | ) | (18,204 | ) | 6,320 | 4(b) | (84,018 | ) | ||||||||||
| 6,919 | 9,804 | (738 | ) | 15,985 | ||||||||||||||
| Non-controlling interests | 1,736 | (417 | ) | - | 1,320 | |||||||||||||
| Total Shareholders' Equity: | 8,656 | 9,387 | (738 | ) | 17,305 | |||||||||||||
| Total Liabilities and Shareholders' Equity | 10,482 | 84,097 | (3,181 | ) | 91,398 |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF COMPREHENSIVE LOSS
For the six month period ended June 30, 2024
(U.S. dollars in thousands)
| SciSparc Ltd. | AutoMax Motors Ltd. | Transaction Accounting Adjustments | Pro Forma | |||||||||||||||
| Revenues | $ | 840 | $ | 56,547 | $ | - | $ | 57,387 | ||||||||||
| Cost of goods sold | (366 | ) | (50,067 | ) | - | (50,433 | ) | |||||||||||
| Gross profit | 474 | 6,480 | 6,954 | |||||||||||||||
| Research and development expenses | 841 | - | - | 841 | ||||||||||||||
| Sales and marketing | 528 | 2,764 | - | 3,292 | ||||||||||||||
| General and administrative expenses | 2,632 | 2,702 | 450 | 4(d) | 5,784 | |||||||||||||
| Operating loss (profit) | 3,527 | (1,014 | ) | 450 | 2,963 | |||||||||||||
| SciSparc's share of losses of company accounted for at equity, net | 208 | - | - | 208 | ||||||||||||||
| Other income | - | (1,126 | ) | (7,058 | ) | 4(c) | (8,184 | ) | ||||||||||
| Finance income | (323 | ) | (605 | ) | 5 | (923 | ) | |||||||||||
| Finance expenses | 272 | 2,247 | 283 | 4(f) | 2,802 | |||||||||||||
| Loss (profit) before income taxes | 3,684 | (498 | ) | (6,320 | ) | (3,134 | ) | |||||||||||
| Taxes on income | (5 | ) | 554 | - | 549 | |||||||||||||
| Total comprehensive loss (profit) | 3,679 | 56 | (6,320 | ) | (2,585 | ) | ||||||||||||
| Equity holders of SciSparc | 3,442 | (56 | ) | (6,320 | ) | (2,934 | ) | |||||||||||
| Non-controlling interests | 237 | 112 | - | 349 | ||||||||||||||
| 3,679 | 56 | (6,320 | ) | (2,585 | ) | |||||||||||||
| Weighted average outstanding shares (basic and diluted) | 2,166,282 | 103,691,969 | 4,126,251 | |||||||||||||||
| Basic and diluted loss (profit) per ordinary share attributable to equity holders of SciSparc | 1.70 | 0.00 | 5 | (0.63 | ) |
Notes to Unaudited Pro Forma Condensed Combined Consolidated Financial
Note 1 - Basis of presentation
unaudited pro forma condensed combined statement of comprehensive loss for the six months period ended June 30, 2024, was derived from
the unaudited consolidated financial statements included as Exhibit 99.1 in the Report of Foreign Private Issuer on Form 6-K
furnished by SciSparc on November 4, 2024 and from the unaudited historical financial information of AutoMax for the same period, and
has been prepared as if the Merger had occurred on January 1, 2024. The unaudited pro forma condensed combined financial information herein
has been prepared to illustrate the effects of the Merger in accordance with IFRS.
Parent Company has accounted for the Merger under the acquisition method of accounting in accordance with the authoritative guidance on
business combinations under the provisions of IFRS 3 ("Business Combinations"). The purchase price allocation is considered
preliminary, and additional adjustments may be recorded during the measurement period in accordance with IFRS 3. The purchase price allocation
will be finalized as the Parent Company receives additional information relevant to the acquisition, including the final valuation and
reconciliation of the assets purchased, including tangible and intangible assets, liabilities assumed. Differences between these preliminary
estimates and the final purchase accounting may occur, and these differences could be material.
SciSparc has been determined
to be the accounting acquirer based on evaluation of the following facts and circumstances:
The unaudited pro forma
condensed combined statement of financial position as of June 30, 2024, assumes that the Merger occurred on June 30, 2024. The unaudited
pro forma condensed combined statements of comprehensive loss for the six months period ended June 30, 2024, presents pro forma
effect to the Merger as if it had been completed on January 1, 2024.
The unaudited pro forma
condensed combined statement of financial position as of June 30, 2024, has been prepared using, and should be read in conjunction with,
The audited pro forma
condensed combined statement of comprehensive loss for the six months period ended June 30, 2024, have been prepared using, and should
be read in conjunction with, the following:
Information has been prepared
based on these preliminary estimates, and the final amounts recorded may differ materially from the information presented. The unaudited
pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax
savings, or cost savings that may be associated with the Merger.
Management has made significant
estimates and assumptions in its determination of the pro forma adjustments. The pro forma adjustments reflecting the consummation
of the Merger are based on certain currently available information and certain assumptions and methodologies that SciSparc believes are
reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes,
may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will
differ from the pro forma adjustments and it is possible the difference may be material. SciSparc believes that these assumptions
and methodologies provide a reasonable basis for presenting all of the significant effects of the Merger based on information available
to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied
in the unaudited pro forma condensed combined financial information.
unaudited pro forma condensed combined financial information is presented solely for informational purposes and is not necessarily indicative
of the combined results of operations or financial position that might have been achieved for the periods presented, nor is it necessarily
indicative of the future results of the combined company.
unaudited pro forma condensed combined financial information does not necessarily reflect what the combined company's financial
condition or results of operations would have been had the transactions occurred on the dates indicated. The unaudited pro forma
condensed combined financial information also may not be useful in predicting the future financial condition and results of operations
of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts
reflected herein due to a variety of factors.
Note 2 - Adjustments to Unaudited Pro Forma
Condensed Combined Financial Information
The unaudited pro forma
condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by Release
No. 33-10786 "Amendments to Financial Disclosures about Acquired and Disposed Businesses." Release No. 33-10786 replaces the
existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction, or Transaction
Accounting Adjustments, and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably
expected to occur, or Management's Adjustments. SciSparc has elected not to present Management's Adjustments and will only
be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.
The unaudited pro forma combined
provision for income taxes does not necessarily reflect the amounts that would have resulted had the combined company following consummation