Business Context and Reporting Period
SciSparc Ltd. (the "Company"), a foreign private issuer headquartered in Tel Aviv, Israel, filed this Form 6-K on February 12, 2026. The filing discloses the execution of a Securities Purchase Agreement (SPA) with an institutional investor, L.I.A. Pure Capital Ltd., to establish a convertible note facility.
Key Financial Metrics and Transaction Details
- Total Facility Size: Up to $10,000,000 in aggregate principal amount of convertible promissory notes.
- Initial Closing: $2,500,000 principal amount issued on February 12, 2026.
- Initial Purchase Price: $2,250,000 (90% of principal).
- Remaining Availability: $7,500,000 (no minimum commitment required).
- Interest Rate: 4% annually, increasing to 14% upon an Event of Default.
- Repayment Terms: Ten equal monthly installments commencing on the 18th month anniversary of issuance (August 12, 2027 for the Initial Note).
- Warrant Coverage: 100% of shares issuable upon conversion. Initial Warrant covers 3,651,554 shares at an exercise price of $0.5477, exercisable immediately with a 3-year term.
- Use of Proceeds: Working capital and general corporate purposes.
Material Changes and Transaction Structure
The filing represents a material change in the Company's capital structure through the establishment of a new debt facility. Key structural features include:
- Conversion Mechanics: Notes are convertible at the Holder's option into Ordinary Shares at the lower of a Fixed Price (closing price prior to issuance) or a Variable Price (88% of the lowest VWAP over 20 days), subject to a floor price of 20% of the Fixed Price.
- Ownership Limitation: Conversion is restricted to prevent the Holder from exceeding 4.99% beneficial ownership of outstanding Ordinary Shares.
- Recourse Limitation: The exercise of Warrants is the Holder's sole recourse against non-payment of principal, interest, or payment premiums.
- Future Drawdowns: Beginning April 1, 2026, the Company may request additional notes in $2,500,000 increments every three months, or more frequently if daily trading volume exceeds 150% of outstanding shares.
Guidance, Risks, and Contingencies
The filing contains forward-looking statements regarding the potential future issuance of notes and the use of proceeds, which are subject to inherent uncertainties. The securities were issued in a private placement exempt from registration under the Securities Act of 1933. The Company has agreed to file a Registration Statement with the SEC to register the resale of shares issuable upon conversion or warrant exercise. The filing explicitly states that the Company assumes no obligation to update forward-looking statements except as required by law. Risks associated with the Company are referenced in its Annual Report on Form 20-F filed on April 24, 2025.
Investor Verification Checklist
- Verify the Company's current cash position and liquidity needs to assess the necessity of the $10M facility.
- Review the impact of the 100% warrant coverage and the 90% purchase price on potential shareholder dilution.
- Confirm the status of the Registration Statement filing required for the resale of convertible shares.
- Analyze the Company's ability to service the debt starting August 2027, given the 18-month interest-only period.
- Check the current trading volume of Ordinary Shares to determine eligibility for accelerated drawdowns under the SPA.