Full Press Release Details
CONSOLIDATED FINANCIAL STATEMENTS
| Page | |
| Consolidated Statements of Financial Position | 2-3 |
| Consolidated Statements of Profit or Loss and Other Comprehensive Loss | 4 |
| Consolidated Statements of Changes in Equity (Deficit) | 5-7 |
| Consolidated Statements of Cash Flows | 8-10 |
| Notes to Interim Consolidated Financial Statements | 11-22 |
STATEMENTS OF FINANCIAL POSITION
| June 30, | December 31, | |||||||||||||
| 2023 | 2022 | 2022 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands | |||||||||||||
| ASSETS | ||||||||||||||
| CURRENT ASSETS: | ||||||||||||||
| Cash and cash equivalents | $ | 2,081 | $ | 12,945 | $ | 3,574 | ||||||||
| Restricted deposit | 44 | 40 | 60 | |||||||||||
| Trade receivables | 43 | - | 77 | |||||||||||
| Other accounts receivable | 815 | 699 | 131 | |||||||||||
| Inventory | 660 | - | 668 | |||||||||||
| 3,643 | 13,684 | 4,510 | ||||||||||||
| NON-CURRENT ASSETS: | ||||||||||||||
| Intangible asset, net | 4 | 4,474 | - | 4,717 | ||||||||||
| Investment in company account for at equity | 3 | 893 | 659 | 591 | ||||||||||
| Investments in financial assets | 5 | 849 | - | 730 | ||||||||||
| Property and equipment, net | 33 | 79 | 57 | |||||||||||
| 6,249 | 738 | 6,095 | ||||||||||||
| $ | 9,892 | $ | 14,422 | $ | 10,605 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF FINANCIAL POSITION
| June 30, | December 31, | |||||||||||||
| 2023 | 2022 | 2022 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands | |||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||
| Trade payables | $ | 1,247 | $ | 874 | $ | 1,199 | ||||||||
| Other accounts payable | 153 | 214 | 193 | |||||||||||
| Warrants | 8 | 1,714 | 10,252 | 2,737 | ||||||||||
| Lease liability | - | 45 | 27 | |||||||||||
| 3,114 | 11,385 | 4,156 | ||||||||||||
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: | 9 | |||||||||||||
| Share capital and premium | 58,898 | 58,547 | 58,592 | |||||||||||
| Reserve from share-based payment transactions | 5,248 | 4,980 | 5,180 | |||||||||||
| Warrants | 5,190 | 5,190 | 5,190 | |||||||||||
| Foreign currency translation reserve | 497 | 497 | 497 | |||||||||||
| Transactions with non-controlling interests | 712 | 559 | 559 | |||||||||||
| Accumulated deficit | ( 66,449 | ) | ( 66,736 | ) | ( 63,569 | ) | ||||||||
| 4,096 | 3,037 | 6,449 | ||||||||||||
| Non-controlling interests | 2,682 | - | - | |||||||||||
| Total equity | $ | 6,778 | $ | 3,037 | $ | 6,449 | ||||||||
| Total liabilities and equity | $ | 9,892 | $ | 14,422 | $ | 10,605 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE LOSS
| Six months ended June 30, | Year Ended December 31, | |||||||||||||
| 2023 | 2022 | 2022 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands, except per share amounts | |||||||||||||
| Revenues | $ | 1,972 | $ | - | $ | 1,347 | ||||||||
| Cost of goods sold | ( 1,267 | ) | - | ( 322 | ) | |||||||||
| Gross profit | 705 | - | 1,025 | |||||||||||
| Research and development expenses | 10a | 781 | 1,474 | 2,803 | ||||||||||
| Sales and marketing | 397 | - | - | |||||||||||
| General and administrative expenses | 11b | 2,494 | 3,339 | 6,509 | ||||||||||
| Operating loss | 2,967 | 4,813 | 8,287 | |||||||||||
| Company's share of losses of companies accounted for at equity, net | 99 | 41 | 109 | |||||||||||
| Finance income | ( 1,024 | ) | - | ( 7,832 | ) | |||||||||
| Finance expenses | 877 | 905 | 2,014 | |||||||||||
| Loss before income taxes | 2,919 | 5,759 | 2,578 | |||||||||||
| Taxes on income | 13 | - | 14 | |||||||||||
| Total comprehensive loss | 2,932 | 5,759 | 2,592 | |||||||||||
| Attributable to: | ||||||||||||||
| Equity holders of the Company | 2,880 | 5,759 | 2,592 | |||||||||||
| Non-controlling interests | 52 | - | - | |||||||||||
| 2,932 | 5,759 | 2,592 | ||||||||||||
| Basic loss per share attributable to equity holders of the Company: | ||||||||||||||
| Loss from operations | 10.85 | 46.80 | 14.82 | |||||||||||
| Diluted loss per share attributable to equity holders of the Company: | ||||||||||||||
| Loss from operations | 10.85 | 46.80 | 14.82 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
six months ended June 30, 2023
| Attributable to equity holders of the Company | ||||||||||||||||||||||||||||||||||||
| Share capital and premium | Reserve from share-based payment transactions | Warrants | Transactions with non- controlling interests | Foreign currency translation reserve | Accumulated deficit | Total | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||
| USD in thousands | ||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 58,592 | 5,180 | 5,190 | 559 | 497 | ( 63,569 | ) | 6,449 | - | 6,449 | |||||||||||||||||||||||||
| Income (loss) | - | - | - | - | - | ( 2,880 | ) | ( 2,880 | ) | ( 52 | ) | ( 2,932 | ) | |||||||||||||||||||||||
| Issue of share capital in respect of investment in affiliate | 288 | - | - | - | - | - | 288 | - | 288 | |||||||||||||||||||||||||||
| Sale of minority interest in subsidiary | - | - | - | 153 | - | - | 153 | 2,734 | 2,887 | |||||||||||||||||||||||||||
| Issue of shares, net of issue expenses | ( 45 | ) | - | - | - | - | - | ( 45 | ) | - | ( 45 | ) | ||||||||||||||||||||||||
| Cost of share-based payment | 63 | 68 | - | - | - | - | 131 | - | 131 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 58,898 | 5,248 | 5,190 | 712 | 497 | ( 66,449 | ) | 4,096 | 2,682 | 6,778 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
six months ended June 30, 2022
| Attributable to equity holders of the Company | ||||||||||||||||||||||||||||||||||||
| Share capital and premium | Reserve from share-based payment transactions | Warrants | Transactions with non- controlling interests | Foreign currency translation reserve | Accumulated deficit | Total | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||
| USD in thousands | ||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2022 | $ | 58,541 | 4,331 | 5,190 | 559 | 497 | ( 60,977 | ) | 8,141 | - | 8,141 | |||||||||||||||||||||||||
| Income (loss) | - | - | - | - | - | ( 5,759 | ) | ( 5,759 | ) | - | ( 5,759 | ) | ||||||||||||||||||||||||
| Expiration of share options | 6 | ( 6 | ) | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Cost of share-based payment | - | 655 | - | - | - | - | 655 | - | 655 | |||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | 58,547 | 4,980 | 5,190 | 559 | 497 | ( 66,736 | ) | 3,037 | - | 3,037 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CHANGES IN EQUITY
year ended December 31, 2022
| Attributable to equity holders of the Company | ||||||||||||||||||||||||||||||||||||
| Share capital and premium | Reserve from share-based payment transactions | Warrants | Transactions with non- controlling interests | Foreign currency translation reserve | Accumulated deficit | Total | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||
| USD in thousands | ||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2022 | $ | 58,541 | 4,331 | 5,190 | 559 | 497 | ( 60,977 | ) | 8,141 | - | 8,141 | |||||||||||||||||||||||||
| Income (loss) | - | - | - | - | - | ( 2,592 | ) | ( 2,592 | ) | - | ( 2,592 | ) | ||||||||||||||||||||||||
| Exercise of warrants | 3 | - | - | - | - | - | 3 | - | 3 | |||||||||||||||||||||||||||
| Cost of share-based payment | 48 | 849 | - | - | - | - | 897 | - | 897 | |||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | 58,592 | 5,180 | 5,190 | 559 | 497 | ( 63,569 | ) | 6,449 | - | 6,449 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Loss | $ | ( 2,932 | ) | $ | ( 5,759 | ) | $ | ( 2,592 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Adjustments to the profit or loss items: | ||||||||||||
| Depreciation and amortization | 267 | 21 | 187 | |||||||||
| Cost of share-based payment | 131 | 655 | 897 | |||||||||
| Finance expenses, net | ( 1,023 | ) | 913 | ( 6,585 | ) | |||||||
| Group's share of losses of company accounted for at equity, net | 98 | 41 | 109 | |||||||||
| Losses from remeasurement of investment in financial assets | 855 | - | 770 | |||||||||
| 328 | 1,630 | ( 4,622 | ) | |||||||||
| Working capital adjustments: | ||||||||||||
| Decrease (increase) in other accounts receivable | ( 684 | ) | 2,205 | 3 | ||||||||
| Increase (decrease) in trade payables | 48 | ( 324 | ) | - | ||||||||
| Increase (decrease) in other accounts payable | ( 40 | ) | 60 | 39 | ||||||||
| Decrease (increase) in trade receivables | 39 | - | ( 77 | ) | ||||||||
| Decrease (increase) in inventory | 8 | - | ( 668 | ) | ||||||||
| ( 629 | ) | 1,941 | ( 703 | ) | ||||||||
| Net cash used in operating activities | $ | ( 3,233 | ) | $ | ( 2,188 | ) | $ | ( 7,917 | ) |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| Cash flows from investing activities: | ||||||||||||
| Investment (withdrawal) in restricted bank deposits | $ | 16 | $ | ( 8 | ) | $ | ( 15 | ) | ||||
| Purchase of property and equipment | - | - | ( 8 | ) | ||||||||
| Investment in a company accounted for at equity | ( 400 | ) | ( 700 | ) | ( 700 | ) | ||||||
| Purchase of financial assets at fair value through profit or loss | ( 687 | ) | - | ( 1,500 | ) | |||||||
| Purchase of intangible asset | - | - | ( 4,861 | ) | ||||||||
| Net cash provided by investing activities | ( 1,071 | ) | ( 708 | ) | ( 7,084 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issue of share capital and warrants (net of issuance expenses) (Note 8) | ( 50 | ) | 9,005 | 9,005 | ||||||||
| Repayment of lease liability | ( 26 | ) | ( 39 | ) | ( 70 | ) | ||||||
| Interest paid on lease liability | - | - | ( 8 | ) | ||||||||
| Proceeds from issuance of shares to minority interests in a subsidiary | 2,887 | - | - | |||||||||
| Exercise of warrants | - | - | 2,770 | |||||||||
| Payment of issuance expenses related to previous period | - | - | 3 | |||||||||
| Net cash provided by financing activities | 2,811 | 8,966 | 11,700 | |||||||||
| Increase (decrease) in cash and cash equivalents | ( 1,493 | ) | 6,070 | ( 3,301 | ) | |||||||
| Cash and cash equivalents at the beginning of the period | 3,574 | 6,875 | 6,875 | |||||||||
| Cash and cash equivalents at the end of the period | 2,081 | $ | 12,945 | $ | 3,574 |
accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| (a) Significant non-cash transactions: | ||||||||||||
| Mutual share exchange of ordinary shares (see note 10) | $ | 288 | $ | - | $ | - |
accompanying notes are an integral part of the interim consolidated financial statements.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
2:- SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Information
Company's unaudited condensed consolidated financial statements have been prepared in accordance with International Accounting
Standard ("IAS") 34, "Interim Financial Reporting". The significant accounting policies adopted in the preparation
of the interim consolidated financial statements are consistent with those followed in the preparation of the 2022 Annual Consolidated
Financial Statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the 2022 Annual
Consolidated Financial Statements. The results for any interim period are not necessarily indicative of results for any future period.
unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the
opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments
that are necessary to present fairly the Company's financial position and results of operations for the interim periods presented.
The results for the six month period ended June 30, 2023, are not necessarily indicative of the results for the year ending December 31,
2023, or for any future period.
of June 30, 2023, there have been no material changes in the Company's significant accounting policies from those that were disclosed
in the 2022 Annual Consolidated Financial Statements.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
3:- INVESTMENT IN ASSOCIATE
March 10, 2022, the Company entered into a Founders and Investment Agreement with Dr. Alon Silberman, or the MitoCareX Agreement. Pursuant
to the MitoCareX Agreement, the Company invested an initial amount of $700, and agreed to invest over the next two years, an additional
$1,000, subject to the achievement of certain pre-determined milestones as agreed upon in the MitoCareX Agreement, for up to a 50.01%
ownership in MitoCareX Bio Ltd. ("MitoCareX"). MitoCareX is focused on the discovery and development of potential drugs for
cancers and other life-threatening conditions. The MitoCareX Agreement also contains customary representations, warranties, covenants,
and indemnification provisions. On March 31, 2022, the closing conditions were met, and the Company paid the initial investment amount
of $700 to MitoCareX. As of December 31, 2022, the Company owns 31.48% of the outstanding shares of MitoCareX.
February 17, 2023, MitoCareX achieved its first milestone pursuant to the MitoCareX Agreement. The first milestone refers to the establishment
of MitoCareX's cloud-based computing infrastructure that is expected to allow its future expansion into machine learning system.
The system is harnessed to investigating mitochondrial carriers that are crucial for cell viability. As a result of MitoCareX meeting
this milestone, the Company will invest an additional $400 in MitoCareX and increase its share ownership in MitoCareX Bio from 31.48%
table below summarizes the fair value of the investment in MitoCareX:
| Balance at January 1, 2022 | $ | - | ||
| Investment date March 31, 2022 | 700 | |||
| Equity losses from investment in MitoCareX | ( 109 | ) | ||
| Balance at December 31, 2022 | 591 | |||
| Investment date March 31, 2023 | 400 | |||
| Equity losses from investment in MitoCareX | ( 98 | ) | ||
| Balance at June 30, 2023 | $ | 893 |
the six months ended June 30, 2023, and 2022, the Company recorded equity losses from the investment in MitoCareX in the amount of $98
and $41, respectively.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
4:- INTANGIBLE ASSET
September 30, 2022, the Company announced the closing of the Acquisition. In connection with the Acquisition, the Company incorporated
a new wholly owned Delaware subsidiary, SciSparc US, to hold the new assets. The definitive agreement for the acquisition of the Brand
was entered into with Merhavit M.R.M Holding and Management Ltd ("M.R.M").
the closing, the Company paid a base cash payment of $4,540 and in 12 months following the closing agreed to pay an additional deferred
cash payment equal to a multiple of 3 times the amount by which the Brand's EBITDA exceeds $1,120 during the 12-month period following
the closing of the Acquisition. The Company paid an additional $321 as purchase costs.
addition, the Company issued to M.R.M $15,000 worth of warrants to purchase ordinary shares of the Company at an exercise price of $7.00
per share (with a cashless exercise mechanism) and with an exercise period of five years from the closing of the Acquisition (the "September
2022 Warrants"). The September 2022 Warrants will become exercisable upon the earlier of (i) an achievement of $100,000 of gross
sales by the Brand in the aggregate or (ii) if the price of our Ordinary Shares closes at $10.00 or above.
Company reviewed the transaction and deemed it to be the purchase of assets for accounting purposes under generally accepted accounting
principles and not as a business combination. The Company reviewed the guidance under IFRS 3 for the transaction and determined that
the fair value of the gross assets acquired was concentrated in a single identifiable asset, a brand. Accordingly, the Company treated
the transaction as an asset acquisition. On the closing date of the Acquisition, the Company fully recognized the acquisition amount
total of $4,861 as an intangible asset, to be amortized over a period of 10 years.
table below summarizes the fair value of the intangible asset:
| Balance at January 1, 2022 | $ | - | ||
| Purchase date September 30, 2022 | 4,861 | |||
| Depreciation of intangible asset | ( 144 | ) | ||
| Balance at December 31, 2022 | 4,717 | |||
| Depreciation of intangible asset | ( 243 | ) | ||
| Balance at June 30, 2023 | $ | 4,474 |
the year ended December 31, 2022, the Company recognized depreciation expenses in respect to intangible asset in the amount of $144.
estimated fair values of the tangible and intangible assets in respect of the Acquisition of the Wellution brand are provisional
and are based on information that was available as of the Acquisition date to estimate the fair value of these amounts. The Group's
management believes the information provides a reasonable basis for estimating the fair values of these amounts but is waiting for additional
information necessary to finalize those fair values. Therefore, provisional measurements of fair value that appear are subject to change.
The Group expects to finalize the tangible and intangible assets valuation and complete the Acquisition accounting as soon as practicable
but no later than the measurement period.
the six months ended June 30, 2023, and 2022, the Company recorded depreciation expenses with respect to intangible asset in the amount
of $243 and $ nil, respectively.
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
5:- INVESTMENT IN FINANCIAL ASSETS
June 25, 2023, the Company entered into a Share Purchase Agreement (the "Agreement") with AutoMax Motors Ltd. ("AutoMax"),
an Israeli company traded on the Tel Aviv Stock Exchange ("TASE") and the leading parallel importer and distributor of vehicles
in Israel, pursuant to which, at the closing and upon the terms and conditions set forth in the Agreement, the Company will invest NIS
2,500,000 in cash, in exchange for ordinary shares, NIS 0.05 par value, of AutoMax (the "AutoMax Shares") based on a price
per share of NIS 0.5. As of June 30, 2023, the listed share price of AutoMax on the TASE was NIS 0.41, and the Company has recorded a