Full Press Release Details
CONDENSED COMBINED FINANCIAL INFORMATION
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 Tel Aviv Stock Exchange 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, November 26, 2024, March 27, 2025, and on May 8, 2025, 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 December 31, 2024, and has been prepared to reflect the effect of the
acquisition as if it had occurred on December 31, 2024. The unaudited pro forma condensed combined statement of comprehensive loss for
the year ended December 31, 2024, gives effect to the acquisition as if it had been completed 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
unaudited pro forma condensed combined financial information is derived from and should be read in conjunction with the Parent Company's
historical audited financial statements for the year ended December 31, 2024 and the historical audited financial statements of AutoMax.
amounts in the historical financial statements of AutoMax are presented in NIS and in the unaudited pro forma condensed combined statement
of financial position, the amounts are presented in USD, translated using a rate of NIS 3.647 to USD 1.00, the last exchange rate published
by the Bank of Israel on December 31, 2024, the last day of the reporting period, as determined according to accepted accounting practices.
amounts in the historical financial statements of AutoMax are presented in NIS and in the unaudited pro forma condensed combined statement
of comprehensive loss, the amounts are presented in USD, translated using a rate of NIS 3.699 to USD 1.00, the average exchange rate during
the reporting period as published by the Bank of Israel, as determined according to accepted accounting practices
Estimated consideration of
approximately $3.15 million is based on the Parent Company's 30 day average closing share price of $0.295 between March 31, 2025,
and May 23, 2025. 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
As of December 31, 2024
(U.S. dollars in thousands)
| SciSparc Ltd. | AutoMax Motors Ltd. | Transaction Accounting Adjustments | Pro Forma | ||||||||||||||||
| Assets | |||||||||||||||||||
| Current Assets: | |||||||||||||||||||
| Cash | $ | 1,540 | $ | 407 | $ | (390 | ) | 4(b) | $ | 1,557 | |||||||||
| Restricted deposit | 20 | - | - | 20 | |||||||||||||||
| Short-term deposit | - | - | - | - | |||||||||||||||
| Trade receivables | 10 | 7,920 | - | 7,930 | |||||||||||||||
| Bridge loan to related party | 4,224 | (4,224 | ) | 4(e) | - | ||||||||||||||
| Investment in short-term financial asset | 517 | 517 | |||||||||||||||||
| Receivables and debit balances | - | 18,260 | - | 18,260 | |||||||||||||||
| Receivable current taxes | - | 7 | - | 7 | |||||||||||||||
| Other accounts receivable | 1,079 | - | - | 1,079 | |||||||||||||||
| Inventory | 113 | 57,526 | - | 57,639 | |||||||||||||||
| Indemnity asset | - | 274 | - | 274 | |||||||||||||||
| Total Current Assets | 7,503 | 84,394 | (4,614 | ) | 87,283 | ||||||||||||||
| Non-current assets: | |||||||||||||||||||
| Long term bank deposits | - | 341 | - | 341 | |||||||||||||||
| Intangible asset, net | 1,479 | 4,511 | - | 5,990 | |||||||||||||||
| Investments in company accounted for at equity | 952 | - | - | 952 | |||||||||||||||
| Right-of-use assets, net | - | 4,237 | - | 4,237 | |||||||||||||||
| Investment in companies handled according to the book value method | - | 3,148 | - | 3,148 | |||||||||||||||
| Payment for credit balance | - | 1,416 | - | 1,416 | |||||||||||||||
| Long term prepaid expenses | - | 160 | - | 160 | |||||||||||||||
| Investments in financial assets | 354 | 47 | (252 | ) | 4(f) | 149 | |||||||||||||
| Property and equipment, net | 59 | 1,799 | - | 1,858 | |||||||||||||||
| Deferred taxes | - | - | - | - | |||||||||||||||
| Total Non-current Assets | 2,844 | 15,659 | (252 | ) | 18,251 | ||||||||||||||
| Total Assets | $ | 10,347 | 100,053 | (4,866 | ) | 105,534 | |||||||||||||
| Liabilities | |||||||||||||||||||
| Current liabilities: | |||||||||||||||||||
| Short term loan and current portion of long-term loans | $ | - | $ | 49,543 | $ | - | $ | 49,543 | |||||||||||
| Liability for bonds | - | 3,940 | - | 3,940 | |||||||||||||||
| Related parties | - | 4,276 | (4,276 | ) | 4(e) | - | |||||||||||||
| Trade payables | 816 | 13,240 | 14,056 | ||||||||||||||||
| Other accounts payable | 205 | 7,964 | - | 8,169 | |||||||||||||||
| Payable current taxes | - | 324 | - | 324 | |||||||||||||||
| Warrants | 341 | - | - | 341 | |||||||||||||||
| Lease liability | 37 | - | - | 37 | |||||||||||||||
| Total Current liabilities | 1,399 | 79,287 | (4,276 | ) | 76,410 | ||||||||||||||
| Non-current liabilities: | |||||||||||||||||||
| Lease liability | 9 | 3,269 | - | 3,278 | |||||||||||||||
| Long term loans | - | 3,082 | - | 3,082 | |||||||||||||||
| Loans from non-controlling shareholders | - | 284 | - | 284 | |||||||||||||||
| Tax liability | - | 174 | - | 174 | |||||||||||||||
| Liability for bonds | - | 5,578 | - | 5,578 | |||||||||||||||
| Employees | - | 16 | - | 16 | |||||||||||||||
| Total Current liabilities | 9 | 12,403 | - | 12,412 | |||||||||||||||
| Total Liabilities | $ | 1,408 | 91,690 | (4,276 | ) | 88,822 | |||||||||||||
| Shareholders' Equity: | |||||||||||||||||||
| Share capital and premium | $ | 70,886 | $ | 22,937 | $ | 2,633 | 4(a) | $ | 96,456 | ||||||||||
| Reserve from share-based payment transactions | 5,746 | 5,521 | (5,521 | ) | 4(a) | 5,746 | |||||||||||||
| Warrants | 5,190 | 506 | (506 | ) | 4(a) | 5,190 | |||||||||||||
| Foreign currency translation reserve | 497 | (66 | ) | - | 431 | ||||||||||||||
| Transactions with non-controlling interests | 810 | - | - | 810 | |||||||||||||||
| Accumulated deficit | (74,975 | ) | (19,834 | ) | 2,804 | (92,005 | ) | ||||||||||||
| 8,154 | 9,064 | (590 | ) | 16,628 | |||||||||||||||
| Non-controlling interests | 785 | (701 | ) | - | 84 | ||||||||||||||
| Total Shareholders' Equity: | 8,939 | 8,363 | (590 | ) | 17,712 | ||||||||||||||
| Total Liabilities and Shareholders' Equity | 10,347 | 100,053 | (4,866 | ) | 105,534 |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF COMPREHENSIVE LOSS
For the year ended December 31, 2024
(U.S. dollars in thousands)
| SciSparc Ltd. | AutoMax Motors Ltd. | Transaction Accounting Adjustments | Pro Forma | ||||||||||||||||
| Revenues | $ | 1,306 | $ | 107,643 | $ | - | $ | 108,949 | |||||||||||
| Cost of goods sold | (800 | ) | (93,830 | ) | - | (94,630 | ) | ||||||||||||
| Gross profit | 506 | 13,813 | 14,319 | ||||||||||||||||
| Research and development expenses | 1,707 | - | - | 1,707 | |||||||||||||||
| Sales and marketing | 1,515 | 5,845 | - | 7,360 | |||||||||||||||
| General and administrative expenses | 4,526 | 4,793 | 2,058 | 4(d) | 11,377 | ||||||||||||||
| Impairment of intangible asset | 1,344 | - | - | 1,344 | |||||||||||||||
| Granting options to employees | - | 33 | - | 33 | |||||||||||||||
| Other incomes | (1,270 | ) | (1,358 | ) | - | (2,628 | ) | ||||||||||||
| Operating loss (profit) | 7,316 | (4,500 | ) | 2,058 | 4,874 | ||||||||||||||
| SciSparc's share of losses of company accounted for at equity, net | 429 | 573 | - | 1,002 | |||||||||||||||
| Other income | - | - | (5,119 | ) | 4(c) | (5,119 | ) | ||||||||||||
| Finance income | (612 | ) | (818 | ) | 5 | (1,425 | ) | ||||||||||||
| Finance expenses | 353 | 4,716 | 252 | 4(f) | 5,321 | ||||||||||||||
| Loss (profit) before income taxes | 7,486 | (29 | ) | (2,804 | ) | 4,653 | |||||||||||||
| Taxes on income | (14 | ) | 1,409 | - | 1,395 | ||||||||||||||
| Total comprehensive loss (profit) | 7,472 | 1,380 | (2,804 | ) | 6,048 | ||||||||||||||
| Equity holders of SciSparc | 6,284 | 1,000 | (2,804 | ) | 4,480 | ||||||||||||||
| Non-controlling interests | 1,188 | 380 | - | 1,568 | |||||||||||||||
| Total comprehensive loss (profit) | 7,472 | 1,380 | (2,804 | ) | 6,048 | ||||||||||||||
| Weighted average outstanding shares (basic and diluted) | 5,824,972 | 103,691,969 | 11,095,184 | ||||||||||||||||
| Basic and diluted loss (profit) per ordinary share attributable to equity holders of SciSparc | 1.28 | 0.01 | 5 | 0.54 |
Notes to Unaudited Pro Forma Condensed Combined
Consolidated Financial Statements
unaudited pro forma condensed combined statement of comprehensive loss for the year ended December 31, 2024, was derived from the audited
consolidated financial statements included in SciSparc's Annual Report on Form 20-F for the year ended December 31, 2024, filed
by SciSparc on April 24, 2025, or the Annual Report, and from the audited historical consolidated financial statements of AutoMax for
the same period, included as Exhibit 99.2 in this Report of Foreign Private Issuer on Form 6-K, 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 December 31, 2024, assumes that the Merger occurred on December 31, 2024. The
unaudited pro forma condensed combined statements of comprehensive loss for the year ended December 31, 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 December 31, 2024, has been prepared using, and should be read in conjunction
with, the following:
The audited pro forma condensed combined
statement of comprehensive loss for the year ended December 31, 2024, have been prepared using, and should be read in conjunction with,
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