Exhibit 99.1
SCISPARC LTD.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2025
UNAUDITED
INDEX
1
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| June 30, | December 31, | |||||||||||||
| 2025 | 2024 | 2024 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands | |||||||||||||
| ASSETS | ||||||||||||||
| CURRENT ASSETS: | ||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||
| Restricted deposit | ||||||||||||||
| Short-term deposit | ||||||||||||||
| Trade receivables | ||||||||||||||
| Other accounts receivable | ||||||||||||||
| Investments in short-term financial assets | 7g | |||||||||||||
| Loans to related parties | 5 | |||||||||||||
| Inventory | ||||||||||||||
| NON-CURRENT ASSETS: | ||||||||||||||
| Intangible asset, net | 4 | |||||||||||||
| Related parties | 5,7 | |||||||||||||
| Investment in company account for at equity | 3 | |||||||||||||
| Investments in financial assets | 5 | |||||||||||||
| Property and equipment, net | ||||||||||||||
| $ | $ | $ | | |||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
2
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| June 30, | December 31, | |||||||||||||
| 2025 | 2024 | 2024 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands | |||||||||||||
| LIABILITIES AND EQUITY (DEFICIENCY) | ||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||
| Trade payables | $ | $ | $ | |||||||||||
| Other accounts payable | ||||||||||||||
| Convertible debenture | 6 | |||||||||||||
| Warrants | 9 | |||||||||||||
| Other short-term liability | ||||||||||||||
| Lease liability | ||||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||||
| Related party | 7d | |||||||||||||
| Lease liability | ||||||||||||||
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: | 10 | |||||||||||||
| Share capital and premium | ||||||||||||||
| Reserve from share-based payment transactions | ||||||||||||||
| Warrants | ||||||||||||||
| Foreign currency translation reserve | ||||||||||||||
| Transactions with non-controlling interests | ||||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||||
| ( | ) | |||||||||||||
| Non-controlling interests | ||||||||||||||
| Total equity (deficiency) | $ | ( | ) | $ | $ | |||||||||
| Total liabilities and equity | $ | $ | $ | |||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
3
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE LOSS
| Six months ended June 30, | Year Ended December 31, | |||||||||||||
| 2025 | 2024 | 2024 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands, except per share amounts | |||||||||||||
| Revenues | $ | $ | $ | |||||||||||
| Cost of goods sold | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||
| Research and development expenses | 11a | |||||||||||||
| Sales and marketing | ||||||||||||||
| Impairment of intangible asset | ||||||||||||||
| General and administrative expenses | 11b | |||||||||||||
| Other income | 12 | ( | ) | ( | ) | |||||||||
| Operating loss | ||||||||||||||
| Company’s share of losses of companies accounted for at equity, net | ||||||||||||||
| Finance income | ( | ) | ( | ) | ( | ) | ||||||||
| Finance expenses | ||||||||||||||
| Loss on impairment of loans | 5 | |||||||||||||
| Loss before income taxes | | |||||||||||||
| Taxes on income | ( | ) | ( | ) | ||||||||||
| Total comprehensive loss | ||||||||||||||
| Attributable to: | ||||||||||||||
| Equity holders of the Company | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Basic loss per share attributable to equity holders of the Company: | ||||||||||||||
| Loss from operations | (*) | |||||||||||||
| Diluted loss per share attributable to equity holders of the Company: | ||||||||||||||
| Loss from operations | (*) | |||||||||||||
| (*) |
The accompanying notes are an integral part of the interim consolidated financial statements.
4
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
For the six months ended June 30, 2025
| 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, 2025 | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Recognition of conversion feature in convertible debenture | ||||||||||||||||||||||||||||||||||||
| Cost of share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
5
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
For the six months ended June 30, 2024
| 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, 2024 | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issuance of shares, net of issuance expenses | ||||||||||||||||||||||||||||||||||||
| Cost of share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | ( | ) | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
6
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
For the year ended December 31, 2024
| 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, 2024 | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issuance of share capital, net of issuance expenses | ||||||||||||||||||||||||||||||||||||
| Cost of share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
7
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Adjustments to the profit or loss items: | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Loss on impairment of intangible asset | ||||||||||||
| Cost of share-based payment | ||||||||||||
| Finance expenses, net | ( | ) | ( | ) | ( | ) | ||||||
| Loss on impairment of loans | ||||||||||||
| Group’s share of losses of company accounted for at equity, net | ||||||||||||
| Losses from remeasurement of investment in financial assets | ||||||||||||
| Working capital adjustments: | ||||||||||||
| Decrease (increase) in other accounts receivable | ( | ) | ||||||||||
| Increase (decrease) in trade payables | ( | ) | ||||||||||
| Increase in other accounts payable | ||||||||||||
| Increase (decrease) in related parties | ( | ) | ||||||||||
| Decrease (increase) in trade receivables | ( | ) | ||||||||||
| Decrease (increase) in inventory | ( | ) | ||||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of the interim consolidated financial statements.
8
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| Cash flows from investing activities: | ||||||||||||
| Investment (withdrawal) in restricted bank deposits | $ | ( | ) | $ | $ | |||||||
| Investment in short-term bank deposits | ||||||||||||
| Sale (Purchase) of property and equipment | ( | ) | ||||||||||
| Investment in a company accounted for at equity | ( | ) | ( | ) | ||||||||
| Investments in financial assets | ( | ) | ||||||||||
| Bridge loan to related parties | ( | ) | ( | ) (*) | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of share capital and warrants (net of issuance expenses) | | |||||||||||
| Repayment of lease liability | ( | ) | ( | ) | ( | ) | ||||||
| Interest paid on lease liability | ( | ) | ||||||||||
| Proceeds from issuance of convertible debentures | ||||||||||||
| Net cash provided by financing activities | ||||||||||||
| Increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Cash and cash equivalents at the beginning of the period | ||||||||||||
| Cash and cash equivalents at the end of the period | $ | $ | $ | |||||||||
| (*) |
The accompanying notes are an integral part of the interim consolidated financial statements.
9
SCISPARC LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| (a) Significant non-cash transactions: | ||||||||||||
| Right-of-use asset recognized with corresponding lease liability | $ | $ | $ | |||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
10
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 1:- GENERAL
| a. | SciSparc Ltd. (“SciSparc” or the “Company” or the “Group”), a specialty clinical-stage pharmaceutical company, was incorporated in Israel and commenced its operations on August 23, 2004. Until March 2014, SciSparc and its subsidiaries at the time were mainly engaged in developing several innovative immunotherapy products and SciSparc’s own patents in the immunotherapy field. In August 2015, the Company decided to adopt a different business strategy and began focusing on developing a portfolio of approved drugs based on cannabinoid molecules. With this focus, the Company, through its majority owned subsidiary, is currently engaged in development programs based on Δ9-tetrahydrocannabinol (“THC”) and/or non-psychoactive cannabidiol for the treatment of Tourette syndrome, Alzheimer’s disease and agitation, autism spectrum disorder and Status Epilepticus. The headquarters of the Company are located in Tel Aviv, Israel. |
| The Company’s ordinary shares are listed on Nasdaq and are trading under the symbol “SPRC”. | ||
| As of June 30, 2025, the Company had four private subsidiaries, including an inactive company incorporated under the laws of Israel: Evero Health Ltd. (“Evero”); an inactive company incorporated under the laws of Israel: Brain Bright Ltd. (“Brain Bright”); a company incorporated under the laws of Israel: SciSparc Merger Sub Ltd. (“Merger Sub”), a company incorporated under the laws of Israel; and a company incorporated under the laws of the State of Delaware: SciSparc Nutraceuticals Inc. (“SciSparc Nutraceuticals”, together with Evero, Brain Bright, and Merger Sub, the “Subsidiaries”). | ||
| On June 24, 2025, the Company announced its intent to effect a one-for-twenty one (1-for-21) reverse share split (the “Reverse Share Split”) of the Company’s issued and outstanding ordinary shares, no par value per share (the “Ordinary Shares”), which became effective at the market open on July 3, 2025. The Reverse Share Split was approved by the Company’s shareholders at the Company’s Annual General Meeting of Shareholders held on October 23, 2024, to be effected at the board of directors’ discretion within the approved parameters. | ||
| Consequently, all share numbers, share prices, and exercise prices have been retroactively adjusted in these interim consolidated financial statements for all periods presented to give effect to the Reverse Share Split. |
| b. | These interim consolidated financial statements should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2024. |
11
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 1:- GENERAL (cont.)
| c. | The Company incurred a net loss of $ | |
| Following the ongoing uncertainty surrounding AutoMax, the Company
recognized a loss on impairment of loans granted to AutoMax in the amount of $ | ||
| The Company intends to finance operating costs over the next twelve months through a combination of actions that may include existing cash on hand and issuing equity and/or debt securities. | ||
| The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities and commitments in the normal course of business. | ||
| The interim consolidated financial statements for the period ended June 30, 2025, do not include any adjustments to the carrying amounts and classifications of assets and liabilities that might result should the Group be unable to continue as a going concern. |
| d. | The interim consolidated financial statements of the Company for the six-month period ended on June 30, 2025, were approved for issuance on November 17, 2025. In connection with the preparation of the interim consolidated financial statements and in accordance with authoritative guidance for subsequent events, the Company evaluated subsequent events after the consolidated statements of financial position date of June 30, 2025, through November 17, 2025, the date on which the unaudited interim consolidated financial statements were available to be issued. |
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
Unaudited Interim Financial Information
The 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 2024 Annual Consolidated Financial Statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the 2024 Annual Consolidated Financial Statements. The results for any interim period are not necessarily indicative of results for any future period.
The 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, 2025, are not necessarily indicative of the results for the year ending December 31, 2025, or for any future period.
As of June 30, 2025, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2024 Annual Consolidated Financial Statements.
12
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 3:- INVESTMENT IN ASSOCIATE
On November 25, 2023, MitoCareX
Bio Ltd. (“MitoCareX”) achieved its second milestone pursuant to an investment agreement signed with the Company. As a
result of MitoCareX meeting this milestone, the Company invested an additional sum of $
On September 26, 2024, the
Company signed a non-binding letter of intent relating to the sale of its entire ownership interest in MitoCareX to N2OFF, Inc.
(“N2OFF”), a publicly-traded company in the United States which is a related party. On February 25, 2025, the Company
entered into a Securities Purchase and Exchange Agreement, as amended (the “SPEA”), together with MitoCareX, Dr. Alon
Silberman and Prof. Ciro Leonardo Pierri (together with SciSparc, the “Sellers”), pursuant to which the Sellers agreed
to sell their stakes in MitoCareX to N2OFF, thereby resulting in MitoCareX becoming a wholly-owned subsidiary of N2OFF. Pursuant to
the terms of the SPEA, in exchange for transferring its holdings in MitoCareX, SciSparc shall receive from N2OFF a cash payment of
$
During the six months ended June 30,
2025, and 2024, the Company recorded equity losses from the investment in MitoCareX in the amount of $
The table below summarizes the fair value of the investment in MitoCareX:
| Balance at January 1, 2024 | $ | |||
| Investment following achievement of first milestone | ||||
| Equity losses from investment in MitoCareX | ( | ) | ||
| Balance at December 31, 2024 | ||||
| Investment following achievement of second milestone | ||||
| Equity losses from investment in MitoCareX | ( | ) | ||
| Balance at June 30, 2025 | $ |
13
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 4:- INTANGIBLE ASSET
On September 30, 2022, the Company announced the closing of the acquisition (“Wellution Acquisition”) of WellutionTM, an Amazon Marketplace account and American food supplement and cosmetics brand and trademark (the “Brand”). In connection with the Wellution Acquisition, the Company incorporated a new wholly owned Delaware subsidiary, SciSparc Nutraceuticals Inc., 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”).
At the closing, the Company paid a
base cash payment of $
The Company reviewed the transaction
and deemed it to be the purchase of assets for accounting purposes under generally accepted accounting principles. 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 $
In the year ended December 31, 2024,
the Brand recorded significant losses. As of December 31, 2024, the Company has determined there are signs of decline in the value of
the Brand and recognized a loss as a result of impairment to its intangible asset of $
The impairment loss was determined
based on the revenue projections of the Brand, using the relief from royalty approach. Under the relief from royalty approach, the fair
value of a brand is determined based on discounted future royalty payments that owner of the asset would have been required to pay if
instead of purchasing the intangible asset it would have been licensed from a third party. Revenues were projected for a period of
The table below summarizes the fair value of the intangible asset:
| Balance at January 1, 2024 | $ | |||
| Loss on impairment of intangible asset | ( | ) | ||
| Depreciation of intangible asset | ( | ) | ||
| Balance at December 31, 2024 | ||||
| Depreciation of intangible asset | ( | ) | ||
| Balance at June 30, 2025 | $ |
During the six months ended June 30,
2025, and 2024, the Company recorded depreciation expenses with respect to intangible asset in the amount of $
On October 10, 2025, the Company sold its holding in Scisparc Nutraceuticals Inc. to Neurothera Labs Inc. as part of the Transaction (see note 14d).
14
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 5:- INVESTMENT IN FINANCIAL ASSETS
Share Purchase Agreement
On June 25, 2023, the Company entered
into a share purchase agreement (the “Share Purchase 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 Share Purchase Agreement, the Company invested NIS
Bridge Loan Agreement
On January 14, 2024, the Company entered,
as a lender, into an agreement (the “Bridge Loan Agreement”) with AutoMax, pursuant to which AutoMax received from the Company
a bridge loan (the “Bridge Loan”) in the amount of $
The Bridge Loan Agreement states that
the principal amount of the Bridge Loan will bear interest at a rate of
On June 9, 2024, the Company entered
into an amendment (the “Amendment”) to the Bridge Loan Agreement with AutoMax. Pursuant to the Amendment, the Company extended
an additional loan in the amount of $
On September 5, 2024, the Company entered
into a second amendment (the “Second Amendment”) to the Bridge Loan Agreement with AutoMax. Pursuant to the Second Amendment,
the Company extended an additional loan in the amount of $
On May 8, 2025, SciSparc entered into a third amendment to the Bridge Loan Agreement, pursuant to which, in addition to the already existing subordination of the Loan Amount to AutoMax’s Series B Bonds, the Bridge Loan will also be subordinated to AutoMax’s Series C Bonds, issued and traded on the TASE.
15
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 5:- INVESTMENT IN FINANCIAL ASSETS (cont.)
Additional Loan Agreement
On February 27, 2025, the Company entered
into a loan agreement with AutoMax where a $
Merger Agreement
On April 10, 2024, the Company and
AutoMax entered into an Agreement and Plan of Merger, as amended on August 14, 2024, November 26, 2024, March 27, 2025, and on May 8,
2025 (the “Merger Agreement”), pursuant to which SciSparc Merger Sub Ltd., an Israeli limited company and the Company’s
wholly-owned subsidiary was to merge with and into AutoMax, with AutoMax surviving as the Company’s wholly-owned subsidiary
(the “Merger”). Pursuant to the Merger Agreement, the Company’s Ordinary Shares, as well as pre-funded warrants exercisable
into Ordinary Shares, were to be issued to AutoMax’s shareholders at the effective time of the Merger, pursuant to the Exchange
Ratio. Under the Exchange Ratio formula, immediately following the Merger, AutoMax’s shareholders and M.R.M were expected to own
approximately
During September 2025 and following
an investigation by the Israeli Securities Authority and Israeli Police, three senior officials of AutoMax were arrested. Following these
events, on October 6, 2025, the Company announced that it entered into a framework agreement with AutoMax to (i) mutually terminate
the Merger Agreement; (ii) amend the terms of repayment of the Bridge Loan to be repaid in a one lump-sum payment on January 1, 2028;
and (iii) amend the terms of repayment of the Additional Loan to be repaid in monthly installments starting on November 20, 2025, of $
On October 24, 2025, AutoMax announced
that an Israeli court decision, made on October 21, 2025, froze proceedings against AutoMax and appointed a trustee according to an application
from local Israeli banks. According to the application, the total debt owed to the banks amount to over $
The Company has evaluated the probabilities
of recuperating the funds extended to AutoMax in respect of the Bridge Loan and the Additional Loan and has determined that there is a
16
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 6:- CONVERTIBLE DEBENTURE
On February 25, 2025, the Company entered
into securities purchase agreements (the “Securities Purchase Agreements”) with certain investors, pursuant to which the Company
agreed to sell and issue to the investors convertible debentures (the “Debentures”) in the aggregate principal amount of $
The Debentures mature on the one-year
anniversary of the issuance date of the Debentures. Further, interest accrues on the outstanding principal balance of the Debentures at
an annual rate of
At the closing of the transaction,
the Company issued to the investors
General Overview of Valuation Approaches used in the Valuation:
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Economic methodology:
The Debentures fair value was calculated using the Monte Carlo model using the following inputs:
| June 30, 2025 | February 25, 2025 | |||||||
| Dividend yield (%) | ||||||||
| Expected volatility (%) | ||||||||
| Risk-free interest rate (%) | ||||||||
| Underlying share price ($) | ||||||||
| Debentures fair value ($) | ||||||||
During the six months ended June 30,
2025 and 2024, the Company recorded financial income from the change in fair value of the Debentures in the amount of $
In August 2025, certain of the investors
submitted to the Company notices of conversion (the “Conversion Notices”) to convert outstanding principal and accrued interest
of the Debentures, pursuant to which the Company issued an aggregate of
17
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 7:- TRANSACTIONS AND BALANCES WITH RELATED PARTIES
| a. |
| June 30, 2025 | December 31, 2024 | |||||||||||||||
| Key management personnel | Other related parties | Key management personnel | Other related parties | |||||||||||||
| Current assets | $ | $ | $ | |||||||||||||
| Current liabilities | $ | $ | $ | |||||||||||||
| Non-current liabilities | $ | $ | $ | |||||||||||||
| (*) | See note 5. |
| b. |
| Six months ended | Year ended | |||||||||||
| June 30, | December 31, | |||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Research and development expenses | $ | $ | $ | | ||||||||
| c. |
| Six months ended | Year ended | |||||||||||
| June 30, | December 31, | |||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Short-term benefits | $ | $ | $ | | ||||||||
| Management fees | $ | $ | $ | |||||||||
| Cost of share-based payment | $ | $ | $ | |||||||||
| d. | On February 23, 2023, the Company entered into an agreement with Jeffs’ Brands Ltd. (“Jeffs’ Brands”) and Jeffs’ Brands Holdings Inc. (“NewCo Inc.”), a newly-formed wholly owned subsidiary of Jeffs’ Brands, pursuant to which, at the closing and upon the terms and conditions set forth in the agreement, NewCo Inc. acquired from the Company a number of shares of stock equal to approximately a | |
| Pursuant to the agreement, at the closing of the transaction, Jeffs’ Brands and SciSparc Nutraceuticals Inc. entered into a consulting agreement, pursuant to which Jeffs’ Brands provides management services to SciSparc Nutraceuticals Inc. for the Wellution brand for a monthly fee of $ | ||
| As of June 30, 2025, the management fees owed to Jeffs’ Brands
amounted to $ | ||
| On October 10, 2025, the Company sold its holding in Scisparc Nutraceuticals Inc. to Neurothera Labs Inc. as part of the Transaction (see note 14d). |
18
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 7:- TRANSACTIONS AND BALANCES WITH RELATED PARTIES (cont.)
| e. | On March 7, 2022, the Company entered into a cooperation agreement with Clearmind Medicine Inc. (“Clearmind”) pursuant to which the Company and Clearmind test and integrate their core technologies with a view to developing novel psychedelic drug candidates (the “Cooperation Agreement”). Dr. Adi Zuloff-Shani, the Company’s Chief Technologies Officer, Mr. Amitai Weiss, a member of the Company’s board of directors and the Company’s President, and Mr. Adler, the Company’s Chief Executive Officer and Chief Financial Officer serve as officers and directors of Clearmind. | |
| During the six-month period ended June 30, 2025, the Company recognized expenses in respect of the Cooperation Agreement in the amount of $ | ||
| f. | Mr. Weiss, a member of the Company’s board of directors and the Company’s President, was the chairman of the board of directors of AutoMax. Mr. Weiss resigned from the board of directors of AutoMax on October 16, 2025. (see Note 5). | |
| g. | On August 13, 2024, the Company entered into an exclusive patent license agreement (the “License Agreement”), for the out-licensing of its SCI-160 program with Polyrizon Ltd. (“Polyrizon”), a biotech company focused on the development of innovative medical device hydrogels delivered in the form of nasal sprays. Pursuant to the License Agreement, the Company granted Polyrizon a royalty-bearing, exclusive, sub-licensable right and license to the SCI-160 platform (the “License”). Pursuant to the License Agreement, the Company received
On December 30, 2024, pursuant to a share transfer agreement, the Company sold all of the Polyrizon ordinary shares and pre-funded warrants held by it, as well as an aggregate of
On April 1, 2025, the Company entered into a securities purchase agreement with Polyrizon, pursuant to which the Company participated in a private placement of Polyrizon, and invested $
Mr. Oz Adler, the Company’s Chief Executive Officer and Chief Financial Officer, is a member of the board of directors of Polyrizon. |
NOTE 8:- FINANCIAL INSTRUMENTS
Classification of financial assets and financial liabilities:
The financial assets and financial liabilities in the consolidated statements of financial position are classified by groups of financial instruments pursuant to IFRS 9, “Financial Instruments”:
| June 30, | December 31, | |||||||||||||
| 2025 | 2024 | 2024 | ||||||||||||
| Unaudited | Audited | |||||||||||||
| Note | USD in thousands | |||||||||||||
| Financial assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | $ | | ||||||||||
| Short-term deposits | ||||||||||||||
| Related parties | ||||||||||||||
| Other receivables | ||||||||||||||
| Investments in financial assets | ||||||||||||||
| $ | $ | $ | ||||||||||||
| Financial liabilities: | ||||||||||||||
| Credit from others | $ | $ | $ | |||||||||||
| Convertible debenture | ||||||||||||||
| Warrants liability | ||||||||||||||
| Other short-term liability | ||||||||||||||
| Lease liability | ||||||||||||||
| Total financial and lease liabilities | $ | $ | $ | |||||||||||
19
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 9:- WARRANTS
| a. | On June 1, 2022, the Company completed a private offering with an investor for gross proceeds of $ |
The June 2022 Warrants have an exercise
price of $
General Overview of Valuation Approaches used in the Valuation:
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Economic methodology:
The June 2022 Warrants’ fair value was calculated using the Black–Scholes option pricing model, which takes into account the parameters as disclosed below for each period valuated, in which a valuation was performed at (i) the issuance date, and (ii) each reporting date with the following assumptions:
| December 31, 2024 | June 30, 2025 | |||||||
| Dividend yield (%) | ||||||||
| Expected volatility (%) | ||||||||
| Risk-free interest rate (%) | ||||||||
| Underlying share price ($) | ||||||||
| Exercise price ($) | ||||||||
| Warrants fair value ($) | (*) | (*) | ||||||
(*)
The June 2022 Warrants are classified as current warrant liability in the Company’s balance sheet, as they are exercisable at any given time.
During the six months ended June 30, 2025,
and 2024, the Company recorded finance income from the change in fair value of the June 2022 Warrants in the amount of and $
| b. | On February 25, 2025, the Company entered into securities purchase agreements (the “Securities Purchase
Agreements”) with certain investors, pursuant to which the Company agreed to sell and issue to the investors convertible debentures
(the “Debentures”) in the aggregate principal amount of $ |
At the closing of the transaction, the Company issued to the investors
General Overview of Valuation Approaches used in the Valuation:
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
20
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 9:- WARRANTS (cont.)
Economic methodology:
The Debenture Warrants’ fair value was calculated using the Binomial model using the following inputs:
| June 30, 2025 | February 25, 2025 | |||||||
| Dividend yield (%) | ||||||||
| Expected volatility (%) | ||||||||
| Risk-free interest rate (%) | ||||||||
| Underlying share price ($) | ||||||||
| Exercise price ($) | ||||||||
| Warrants fair value ($) | ||||||||
The Debenture Warrants are classified as current warrant liability in the Company’s balance sheet, as they are exercisable at any given time.
During the six months ended June 30,
2025 and 2024, the Company recorded financial income from the change in fair value of the Debenture Warrants in the amount of $
NOTE 10:- EQUITY
Reverse Share Split
On June 24, 2024, the Company announced
its intent to effect a one-for-twenty
| a. |
| June 30, 2025 | December 31, 2024 | June 30, 2024 | ||||||||||||||||||||||
| Authorized | Issued and outstanding | Authorized | Issued and outstanding | Authorized | Issued and outstanding | |||||||||||||||||||
| Number of shares | ||||||||||||||||||||||||
| Ordinary shares, no par value | ||||||||||||||||||||||||
| b. | Changes in share capital: |
Issued and outstanding share capital:
| Number of ordinary shares | ||||
| Balance at January 1, 2025 | ||||
| Shares issued to consultants in respect of exercised Restricted Share Units (“RSUs”) (Note 10e) | ||||
| Rounding shares | ||||
| Balance at June 30, 2025 | ||||
21
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 10:- EQUITY (cont.)
| c. | Rights attached to shares: |
Voting rights at shareholders meetings, right to dividends, rights upon liquidation of the Company and right to nominate the directors in the Company.
| d. | Capital management in the Company: |
The Company’s capital management objectives are to preserve the Company’s ability to ensure business continuity thereby creating a return for the shareholders, investors and other interested parties. The Company is not under any minimal equity requirements nor is it required to attain a certain level of capital return.
| e. | Additional issuance of Ordinary Shares: |
On April 1, 2025, the Company issued
| f. | June 2022 Financing Round (see also note 8) |
On June 1, 2022, the Company completed
the June 2022 Private Placement with an investor for gross proceeds of $
The June 2022 Warrants have an exercise
price of $
The June 2022 Warrants are classified as current warrant liability in the Company’s balance sheet, as they are exercisable at any given time.
During the six-month period ended June 30, 2025, and the year ended December 31, 2024, there were no exercises of the June 2022 Warrants.
22
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 10:- EQUITY (cont.)
| h. | August 2023 Financing Round |
On August 14, 2023, the Company closed
an underwritten public offering (the “2023 Public Offering”) of
| i. | October 2023 Financing Round |
On October 13, 2023, the Company announced
the closing of a private placement with an institutional investor with gross cash proceeds to the Company of approximately $
In connection with the private placement,
the Company issued an aggregate of
During the six-month period ended June 30, 2025, there were no exercises of the October 2023 Warrants.
During the six-month period ended June
30, 2025,
| j. | January 2024 Standby Equity Purchase Agreement |
On January 21, 2024, the Company entered
into a Standby Equity Purchase Agreement (“SEPA”), as amended on February 26, 2024, with YA II PN, LTD (“YA”),
which provided for the sale of up to $
In connection with the SEPA, the Company
may request pre-paid advances of the Commitment Amount, in an amount up to $
In addition, pursuant to the SEPA,
the Company issued to YA an aggregate of
YA will pay all brokerage fees and commissions and similar expenses in connection with the offer and sale of Ordinary Shares by YA pursuant to the SEPA. The Company will pay the expenses (except brokerage fees and commissions and similar expenses) incurred and register pursuant to the Securities Act of 1933, as amended, the offer and sale of the Ordinary Shares pursuant to the SEPA by YA.
23
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 11:- ADDITIONAL INFORMATION TO THE ITEMS OF PROFIT OR LOSS
| Six months ended June 30, | Year Ended December 31, | |||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Unaudited | Audited | |||||||||||
| USD in thousands | ||||||||||||
| a. Research and development expenses: | ||||||||||||
| Wages and related expenses | $ | $ | $ | |||||||||
| Share-based payment | ||||||||||||
| Clinical studies | ||||||||||||
| Regulatory, professional and other expenses | ||||||||||||
| Research and preclinical studies | ||||||||||||
| Chemistry and formulations | ||||||||||||
| | ||||||||||||
| b. General and administrative expenses: | ||||||||||||
| Wages and related expenses | ||||||||||||
| Share-based payment | ||||||||||||
| Professional and directors’ fees | ||||||||||||
| Business development expenses | ||||||||||||
| Office maintenance, rent and other expenses | ||||||||||||
| Investor relations and business expenses | ||||||||||||
| Regulatory expenses | ||||||||||||
| $ | $ | |||||||||||
NOTE 12:- OTHER INCOME
On February 18, 2025, the Company announced that it has reached a settlement agreement (the “Settlement”) regarding a lawsuit it filed in February 2022 with the Economic Division of the Tel Aviv-Jaffa District Court against six of the Company’s former directors (the “Defendants”), case number 34426-02-22 (the “Suit”). The Suit included allegations of breaches of fiduciary duties of the Defendants under the Israeli Companies Law, 5759-1999, relating to a prior acquisition of a pain clinic network through a subsidiary of the Company.
As part of the Settlement, which was
facilitated through mediation and approved by the court, the Company will be entitled to a $
24
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 13:- OPERATING SEGMENTS
The Company applies the principles
of IFRS 8, “Operating Segments” (“IFRS 8”), regarding operating segments. The segment
reporting is based on internal management reports of the Company’s management, which are regularly reviewed by the Chief Operating
Decision Maker (“CODM”) to make decisions about resources to be allocated and assess performance. According to the principles
of IFRS 8, the Company’s management determined that
Segment performance (segment income (loss)) is evaluated based on operating income (loss) in the financial statements. The segment results reported to the CODM include items that are allocated directly to the segments and items that can be allocated on a reasonable basis.
The review of the CODM is carried out according to the results of the segment’s performance. CODM’s review does not include certain expenses that are not related specifically to the activity of each of the segments. Those expenses are presented as reconciliation between segments operating results to total operating results in financial statements.
The Group’s CODM is the Chief Executive Officer of the Company.
| Six months ended June 30, 2025 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Segment loss (gain) | ||||||||||||
| Equity losses from the investment in MitoCareX | ||||||||||||
| Finance expense (income), net | ||||||||||||
| Loss on impairment of loans | ||||||||||||
| Tax income | ||||||||||||
| Loss | ||||||||||||
| Six months ended June 30, 2024 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Segment loss (gain) | ||||||||||||
| Equity losses from the investment in MitoCareX | ||||||||||||
| Finance expense (income), net | ( | ) | ||||||||||
| Tax income | ( | ) | ||||||||||
| Loss | ||||||||||||
| Year ended December 31, 2024 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Segment loss (gain) | ||||||||||||
| Equity losses from the investment in MitoCareX | ||||||||||||
| Finance expense (income), net | ( | ) | ||||||||||
| Tax income | ( | ) | ||||||||||
| Loss | ||||||||||||
25
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 13:- OPERATING SEGMENTS (cont.)
| As of June 30, 2025 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Segment Assets | $ | $ | $ | |||||||||
| Segment Liabilities | $ | $ | $ | |||||||||
| As of December 31, 2024 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Segment Assets | $ | $ | $ | |||||||||
| Segment Liabilities | $ | $ | $ | |||||||||
NOTE 14:- EVENTS AFTER THE REPORTING PERIOD
| a. | In August 2025, certain
investors under the Securities Purchase Agreements, submitted to the Company Conversion Notices to convert outstanding principal and
accrued interest of the Debentures, pursuant to which the Company issued an aggregate of | |
| b. | On September 26, 2025, the Company entered into inducement offer letter agreements (the “Inducement Letters”) with holders (the “Holders”) of certain of the Company’s existing warrants to purchase in the aggregate up to | |
| c. | On August 28, 2025, the Company announced that at an adjourned special general meeting of shareholders held on August 26, 2025, its shareholders voted on and approved, among others, the proposed merger with AutoMax.
On August 28, 2025, the Company announced that in its special general meeting, AutoMax’s shareholders voted on and approved the proposed merger with the Company.
On October 6, 2025, the Company announced that it entered into the Framework Agreement with AutoMax to (i) mutually terminate the Merger Agreement; (ii) amend the terms of repayment of the Bridge Loan to be repaid in a one lump-sum payment on January 1, 2028; and (iii) amend the terms of repayment of the Additional Loan to be repaid in monthly installments starting on November 20, 2025, of $ | |
| d. | On October 9, 2025, the Company entered into an asset and share purchase agreement (the “Agreement”) with Miza III Ventures Inc. (“Miza”), a public traded company listed on the TSX Venture Exchange (“TSXV”), pursuant to which, the Company received a controlling interest in Miza, and transferred to Miza its pharmaceutical portfolio and equity stake of approximately |
26
SCISPARC LTD.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except per share and per unit amounts)
NOTE 14:- EVENTS AFTER THE REPORTING PERIOD (cont.)
| The Transaction closed on October 22, 2025,, and pursuant to the Agreement, at the closing thereof (the “Closing”) the Company transferred to Miza
Pursuant to the Agreement, upon the achievement of the Milestones, the Contingent Right Shares will be issued to the Company as follows: (i)
Following the Closing, Miza changed its name to “NeuroThera Labs Inc.” and is expected to be active in both the pharmaceutical and supplemental sectors.
In addition, at the closing of the Transaction, the Company committed CAD | ||
| e. | On October 20, 2025, upon the satisfaction of the closing conditions of the SPEA, the transaction contemplated thereunder closed (the “MitoCareX Closing”). At the MitoCareX Closing, each of the Sellers transferred their holdings in MitoCareX to N2OFF, thereby resulting in N2OFF holding |
27