SciSparc: Spinning Off Advanced Clinical Stage Portfolio to Publicly Traded Company

SciSparc Ltd. (Nasdaq: SPRC), a specialty clinical-stage pharmaceutical company, has provided updates on the status of its spin-off of advanced clinical-stage pharmaceutical portfolio to a publicly traded company. The company, led by an experienced team of senior executives and scientists, is focused on creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. This article explores the proposed transaction, the valuation of assets, and the potential implications for SciSparc and its shareholders.

SciSparc has signed an amendment to its non-binding letter of intent (LOI) to spin off its advanced clinical-stage pharmaceutical portfolio and equity stake in SciSparc Nutraceuticals Inc. to Miza III Ventures Inc. (TSXV: MIZA.P). The proposed transaction involves the sale of SciSparc's Target Assets to Miza in exchange for 63,300,000 common shares of Miza and up to 48,000,000 contingent rights based on pre-determined milestones. This transaction, if finalized, would result in SciSparc holding a controlling interest in Miza, with an equity stake ranging from a minimum of approximately 75% to a maximum of 84.53%.

The proposed agreement between SciSparc and Miza is estimated to have a total enterprise value of approximately US$ 3.3 million (C$ 4.5 million) for Miza, including its US$ 1.0 million cash position. SciSparc's assets are valued at approximately US$ 11.6 million (C$ 15.8 million) in the agreement. The significant discrepancy between the valuations suggests that SciSparc's pharmaceutical portfolio is a valuable addition to Miza's existing business. The proposed transaction aligns with SciSparc's strategy of creating value for its shareholders and follows the announcement of a proposed merger agreement with AutoMax Motors Ltd.

SciSparc's pharmaceutical portfolio includes SCI-110 for treating persons with Tourette syndrome, which is subject to a phase IIb clinical trial, SCI-110 for treating persons with Alzheimer's disease, the phase II clinical trial of which has been completed, and SCI-210 for treating children with autism, subject to a randomized, double-blind, and placebo-controlled trial that commenced in the first quarter of 2024. The company also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seed oil-based products on the Amazon.com Marketplace.

The proposed transaction, if completed, would result in SciSparc holding a controlling interest in Miza, with an equity stake ranging from a minimum of approximately 75% to a maximum of 84.53%. This transaction aligns with SciSparc's strategy of creating value for its shareholders and follows the announcement of a proposed merger agreement with AutoMax Motors Ltd.

In conclusion, the proposed spin-off of SciSparc's advanced clinical-stage pharmaceutical portfolio to Miza III Ventures Inc. presents an opportunity for SciSparc to create value for its shareholders. The significant valuation of SciSparc's assets compared to Miza's enterprise value suggests that the transaction could be beneficial for both parties. As the transaction progresses, investors should monitor the developments and assess the potential long-term implications for SciSparc and its shareholders.