Scisparc Ltd. current report, Q2 FY2022

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Business Context and Reporting Period

SciSparc Ltd., a foreign private issuer based in Tel Aviv, Israel, filed Form 6-K on May 27, 2022. The report details a definitive securities purchase agreement entered into on the same date for a private placement of units and pre-funded units.

Key Financial Metrics

  • Gross Proceeds: Expected to be $10.0 million.
  • Offering Price: $2.82 per unit (or $0.001 less per pre-funded unit).
  • Securities Issued: 3,546,100 units and pre-funded units.
  • Warrant Terms: Each unit includes two non-tradable warrants exercisable at $2.57 per share for a total of 7,092,200 underlying shares; five-year term.
  • Transaction Costs: 9.0% cash placement fee plus 1.0% non-accountable expense payable to Aegis Capital Corp.
  • Revenue, Profit, and Cash Flow: The filing text does not provide a clear value for historical revenue, profit, cash flow, margins, debt, or liquidity metrics.

Material Changes

This filing represents a material capital event rather than a periodic financial update. The Company is raising capital through a private placement priced at-the-market under Nasdaq rules. No actual units will be issued; instead, the transaction involves ordinary shares and pre-funded units.

Guidance, Outlook, and Risks

  • Use of Proceeds: Net proceeds are intended for general corporate purposes, including working capital.
  • Closing Date: Expected on or about June 1, 2022, subject to customary closing conditions.
  • Registration Status: Securities are not registered under the Securities Act of 1933 and may not be sold in the U.S. absent registration or exemption. The Company agreed to file a registration statement for the resale of ordinary shares and underlying warrant shares.
  • Legal Disclaimer: The report does not constitute an offer to sell or a solicitation of an offer to buy the securities.

Investor Verification Checklist

  • Verify the final closing date and confirmation of the $10.0 million gross proceeds.
  • Confirm the exact net proceeds after deducting the 10% total placement fees and expenses.
  • Review the filed registration statement (Form F-3 or S-8) for the resale of shares and warrants.
  • Assess the dilution impact of the 7,092,200 warrants exercisable at $2.57.
  • Check subsequent filings for any changes to the use of proceeds or working capital requirements.