SPRC 20-F/A
SciSparc Ltd. (SPRC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
OR
For the fiscal year ended
OR
OR
Commission File No.:
(Exact name of registrant as specified in its charter)
Translation of registrant’s name into English: Not applicable
State of
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Chief Executive Officer
Tel:
Email:
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities to be registered or to be registered pursuant to Section 12(b) of the Act: None
Securities registered or to be registered pursuant to Section 12(g) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act of 1934.
Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
U.S. GAAP ☐
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company.
Yes ☐ No
EXPLANATORY NOTE
Due to an administrative error, we are filing this Amendment No. 1 (“Amendment No. 1”) to our Annual Report on Form 20-F (the “Original Filing”) for the sole purpose of amending Item 18 of the Original Filing to: (i) include the Report (the “Report”) of our Independent Registered Public Accounting Firm by Kost Forer Gabbay & Kasierer, a Member of EY Global (“EY”) dated as April 24, 2025 (except for Note 1(d), as to which the date is July 8, 2025); and (ii) add Note 1(d) to the audited consolidated financial statements. The Report of EY that was included in the Original Filing was not the most recent auditor’s report on the financial statements as of December 31, 2024, and for the two years ended on that date. The most recent auditor’s report included dual dating as a result of a one-for-twenty one reverse share split of the Company’s issued and outstanding ordinary shares, no par value per share, effected on July 3, 2025. For clarity, the audited consolidated financial statements as of and for the two fiscal years ended December 31, 2025 included in this Amendment No. 1 are otherwise unchanged, with the exception of the inclusion of Note 1(d), from the audited consolidated financial statements included in the Original Filing.
In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 have been re-executed as of the date of, and are re-filed as part of, this Amendment No. 1 as Exhibits 12.1 and 13.1.
Other than expressly set forth herein, this Amendment No. 1 does not, and does not purport to, amend or restate any other information contained in the Original Filing nor does this Amendment No. 1 reflect any events that have occurred after the Original Filing was filed.
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements and related information pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The consolidated financial statements and the related notes required by this Item are included in this Amendment No.1 to our Annual Report on Form 20-F beginning on page F-1.
1
ITEM 19. EXHIBITS
2
| * | Filed herewith |
| ** | Furnished herewith. |
| # | Previously Filed |
3
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to its Annual Report on Form 20-F filed on its behalf.
| SCISPARC LTD. | ||
| By: | /s/ Oz Adler | |
| Oz Adler | ||
| Chief Executive Officer | ||
Date August 19, 2026
4
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2025
U.S. DOLLARS IN THOUSANDS
INDEX
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of SciSparc Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of SciSparc Ltd. and its subsidiaries (the “Company”) as of December 31, 2025, the related consolidated statements of comprehensive loss, changes in equity and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1B to the financial statements, the Company’s accumulated losses and additional funds needed to maintain its operations raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
F-2
Revenue recognition — Refer to Note 2t to the Consolidated Financial Statements
Critical Audit Matter Description
The Company recognizes revenue from product sales through Amazon’s Fulfillment by Amazon (“FBA”) platform. Revenue is recognized when control of the product transfers to the customer, net of estimated returns. The Company uses Amazon-generated reports and settlement statements to record revenue and reconcile sales and collection activity.
We identified revenue recognized for FBA-channel sales as a critical audit matter because of the use of third-party reports in the recording of revenues and reconciliation of sales and collection activity. This required an increased extent of effort, in relation to our audit as whole, when auditing the occurrence assertion for FBA-channel revenue.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the occurrence assertion of FBA-channel revenue included, among others:
| ● | We agreed FBA-channel revenue to underlying Amazon orders and delivery reports. |
| ● | We tested the Company’s inventory roll-forward and agreed the underlying quantities of product sales to the Company’s recorded revenue. |
| ● | We agreed cash received in bank to Amazon settlement statements and to the respective recorded revenue. |
/s/ Brightman Almagor Zohar & Co.
Certified Public Accountants
A Firm in the Deloitte Global Network
April 29, 2026
We have served as the Company’s auditor since 2026.
F-3
| Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Tel-Aviv 6492102, Israel |
Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
SCISPARC LTD. AND ITS SUBSIDIARIES
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of SciSparc Ltd. and its subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statements of comprehensive loss, changes in equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows from operating activities, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ KOST FORER GABBAY & KASIERER | Tel Aviv, Israel | |
| A Member of EY Global | April 24, 2025, (except for Note 1(d), as to which the date is July 8, 2025) |
We served as the Company’s auditor from 2007 to 2025.
F-4
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| December 31, | ||||||||||
| 2025 | 2024 | |||||||||
| Note | USD in thousands | |||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS: | ||||||||||
| Cash and cash equivalents | 4 | $ | $ | |||||||
| Restricted deposit | ||||||||||
| Trade receivables | ||||||||||
| Other accounts receivable | 6 | |||||||||
| Investments in short-term financial assets | 24g | |||||||||
| Current maturities of long-term loan | 8c | |||||||||
| Loans to a related party | 8c | |||||||||
| Inventory | 5 | |||||||||
| NON-CURRENT ASSETS: | ||||||||||
| Intangible assets, net | 11 | |||||||||
| Investments in an associate accounted for under the equity method | 7 | |||||||||
| Investments in financial assets | 8, 24d | |||||||||
| Property and equipment, net | 10 | |||||||||
| $ | $ | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-5
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| December 31, | ||||||||||
| 2025 | 2024 | |||||||||
| Note | USD in thousands | |||||||||
| LIABILITIES AND EQUITY | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Trade payables | 12 | $ | $ | |||||||
| Other payables | 13 | |||||||||
| Related parties | 24a | |||||||||
| Current maturities of long-term loans | 25b | |||||||||
| Accrued legal contingency | 17e | |||||||||
| NON-CURRENT LIABILITIES: | ||||||||||
| Related party | 24a | |||||||||
| Lease liability, excluding current portion | 9 | |||||||||
| EQUITY: | 18 | |||||||||
| Share capital and premium | ||||||||||
| Reserve from share-based payment transactions | 19 | |||||||||
| Warrants | ||||||||||
| Other reserves | 2d,25 | |||||||||
| Transactions with non-controlling interests | 25 | |||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Equity attributable to owners of the Company | ||||||||||
| Non-controlling interests | ||||||||||
| Total equity | ||||||||||
| Total liabilities and equity | $ | $ | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-6
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
| Year ended December 31, | |||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||
| Note | USD in thousands (except per share data) | ||||||||||||||
| Revenues | 2t | $ | $ | $ | |||||||||||
| Cost of revenues | 20 | ||||||||||||||
| Gross profit | |||||||||||||||
| Research and development expenses | 21a | ||||||||||||||
| Sales and marketing | 21b | ||||||||||||||
| Impairment of intangible assets | |||||||||||||||
| General and administrative expenses | 21c | ||||||||||||||
| Other income, net | 21d | ( |
) | ( |
) | ||||||||||
| Operating loss | |||||||||||||||
| Equity losses of an associate | 7 | ||||||||||||||
| Gain from sale of an associate | 7 | ( |
) | ||||||||||||
| Finance income | 21e | ( |
) | ( |
) | ( |
) | ||||||||
| Finance expenses | 21f | ||||||||||||||
| Loss before income taxes | |||||||||||||||
| Taxes on income | ( |
) | |||||||||||||
| Net loss and total comprehensive loss | |||||||||||||||
| Attributable to: | |||||||||||||||
| Equity holders of the Company | |||||||||||||||
| Non-controlling interests | |||||||||||||||
| Basic and diluted loss per ordinary share attributable to equity holders of the Company (*): | 22 | ||||||||||||||
| (*) |
The accompanying notes are an integral part of the consolidated financial statements.
F-7
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Attributable to equity holders of the Company | ||||||||||||||||||||||||||||||||||||
| Share capital and premium | Reserve from share- based payment transactions | Warrants | Transactions with non- controlling interests | Other reserves | Accumulated deficit | Total | Non- controlling interests | Total equity | ||||||||||||||||||||||||||||
| USD in thousands | ||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Sale of non-controlling interest in subsidiary | ||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares in respect of investment in associate | ||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares, net of issue expenses | ||||||||||||||||||||||||||||||||||||
| Cost of share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issuance of ordinary shares, net of issue expenses | ||||||||||||||||||||||||||||||||||||
| Cost of share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Issuance of ordinary shares, net of issue expenses (note 18k) | ||||||||||||||||||||||||||||||||||||
| Issuance and exercise of warrants (note 18j) | ||||||||||||||||||||||||||||||||||||
| Issuance and conversion of convertible debentures (note 18i) | ||||||||||||||||||||||||||||||||||||
| Deemed issuance of shares by a subsidiary (note 25) | ||||||||||||||||||||||||||||||||||||
| Deemed stock exchange listing expenses (note 25) | ||||||||||||||||||||||||||||||||||||
| Cost of subsidiaries share-based payment (note 25) | ||||||||||||||||||||||||||||||||||||
| Cost of share-based payment | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-8
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| USD in thousands | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||||||
| Adjustments to the profit or loss items: | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Impairment of an intangible asset | ||||||||||||
| Cost of share-based payment | ||||||||||||
| Impairment of loan (see note 8c) | ||||||||||||
| Subsidiaries’ cost of share-based payment (see note 25) | ||||||||||||
| Finance income, net | ( | ) | ( | ) | ( | ) | ||||||
| Equity losses | ||||||||||||
| Deemed stock exchange listing expense | ||||||||||||
| Gain on sale of an associate accounted for under the equity method | ( | ) | ||||||||||
| Losses from remeasurement of investment in financial assets | ||||||||||||
| Working capital adjustments: | ||||||||||||
| Decrease in trade receivables | ||||||||||||
| Decrease (increase) in other accounts receivable | ( | ) | ( | ) | ||||||||
| Decrease (increase) in inventory | ( | ) | ||||||||||
| Increase (decrease) in trade payables | ( | ) | ( | ) | ||||||||
| Increase (decrease) in other payables | ( | ) | ||||||||||
| Increase (decrease) in related parties | ( | ) | ||||||||||
| ( | ) | |||||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of the consolidated financial statements.
F-9
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| USD in thousands | ||||||||||||
| Cash flows from investing activities: | ||||||||||||
| Withdrawal of (investment in) restricted bank deposits | $ | $ | $ | ( | ) | |||||||
| Withdrawal of (investment in) short-term bank deposits | ( | ) | ||||||||||
| Sale of property and equipment | ||||||||||||
| Investment in an associate accounted for under the equity method | ( | ) | ( | ) | ( | ) | ||||||
| Loan to related parties | ( | ) | ( | ) | ||||||||
| Investments in financial assets | ( | ) | ||||||||||
| Proceeds from sale of an affiliate accounted for under the equity method (see note 7) | ||||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of share capital (net of issuance expenses) | ||||||||||||
| Proceeds from exercise of warrants | ||||||||||||
| Sale of non-controlling interest in a subsidiary | ||||||||||||
| Repayment of loans | ||||||||||||
| Receipt of loans | ||||||||||||
| Proceeds from deemed issuance of shares by a subsidiary (see (b) below) | ||||||||||||
| Proceeds from issuance of convertible debentures (see note 18i) | ||||||||||||
| Interest paid on lease liability | ( | ) | ( | ) | ( | ) | ||||||
| Repayment of lease liability | ( | ) | ( | ) | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||||||
| Increase (decrease) in cash | ( | ) | ( | ) | ||||||||
| Cash at the beginning of the period | ||||||||||||
| Cash at the end of the period | $ | $ | $ | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-10
SCISPARC LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| USD in thousands | ||||||||||||
| (a) Significant non-cash financing and investing activities: | ||||||||||||
| Right-of-use asset recognized with corresponding lease liability | ||||||||||||
| Investment in financial asset | ||||||||||||
| Exchange of MitoCareX shares with Nexentis Inc. shares (see Note 7) | ||||||||||||
Conversion of convertible debentures | ||||||||||||
| (b) Assets and liabilities received as consideration for deemed issuance of shares by a subsidiary | ||||
| As of October 22, 2025 | ||||
| Consolidation of NeuroThera (as described in Note 1a) | ||||
| Trade payables | ( | ) | ||
| Net assets received as consideration for deemed issuance of shares by a subsidiary | ( | ) | ||
| Cash received as consideration for deemed issuance of shares by a subsidiary | ( | ) | ||
The accompanying notes are an integral part of the consolidated financial statements.
F-11
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 1:- | GENERAL |
| a. | SciSparc Ltd. (formerly known as Therapix Biosciences Ltd.) (“SciSparc” or the “Company” or the “Group”), a 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. SciSparc’s focus is on creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the Company, through its subsidiary NeuroThera Labs Inc. (formerly known as Miza III Ventures Inc.) (TSXV:NTLX) (“NeuroThera”), is currently engaged in the following drug development programs based on Δ9-tetrahydrocannabinol (“THC”) and/or non-psychoactive cannabidiol for the treatment of Tourette syndrome, Alzheimer’s disease and agitation; and SCI-210 for the treatment of autism spectrum disorder and status epilepticus. The Company, through NeuroThera, also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seed oil-based products on the Amazon Marketplace. |
The Company’s ordinary shares, no par value per share (“ordinary shares”), are listed on Nasdaq and are trading under the symbol “SPRC”.
As of December 31, 2025, the Company has a controlling interest in
NeuroThera, a publicly traded company on the TSX Venture Exchange (the “TSXV”) in Canada, Evero Health Ltd. (“Evero”)
and Brain Bright Ltd. (“Brain Bright”), together, the “Subsidiaries. Also, as of December 31, 2025, the Company holds
Evero and Brain Bright are inactive Israeli incorporated companies.
| b. | The Group incurred operating losses since its incorporation
and expects to continue to incur operating losses for the foreseeable future. As of December 31, 2025, the Group had an accumulated deficit
of approximately $ |
As of December 31, 2025, the Company’s cash and cash equivalents
totaled $
The accompanying consolidated financial statements were 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. Such financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
F-12
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 1:- | GENERAL (CONT.) |
| c. | Definitions and Meanings: |
| The Company | - | SciSparc Ltd. (formerly known as Therapix Biosciences Ltd.) | |
| The Group | - | SciSparc Ltd. (formerly Therapix Biosciences Ltd.) and its Subsidiaries, as detailed in Note 1a. | |
| SNI | - | SciSparc Neutraceuticals Inc. | |
| Subsidiaries | - | Companies that are controlled by the Company, as defined in IFRS 10, “Consolidated Financial Statements”, and whose accounts are consolidated with those of the Company. | |
| Associate | - | An entity over which the Company has significant influence, as defined in IAS 28, “Investment in Associates and Joint Ventures” and is not a Subsidiary. | |
| Related Parties | - | As defined in IAS 24, “Related Party Disclosures”. | |
| IAS | - | International Accounting Standards issued by the International Accounting Standards Board (“IASB”). | |
| IFRS | - | International Financial Reporting Standards issued by the IASB. |
| d. | On July 3, 2025, the Company effected a twenty one-for-one reverse share split of its ordinary shares. All share and per share information has been retroactively adjusted to reflect the reverse share split for all periods presented. |
| NOTE 2:- | MATERIAL ACCOUNTING POLICIES |
The following accounting policies have been applied consistently in the consolidated financial statements for all periods presented, unless otherwise stated.
| a. | Basis of presentation of the financial statements: |
The consolidated financial statements have been prepared in accordance with IFRS Accounting Standards and their interpretations, which were issued by the IASB.
The Company’s financial statements have been prepared on a cost basis, unless otherwise indicated.
The consolidated financial statements are presented in USD and all values are rounded to the nearest thousand (’000), except when otherwise indicated.
| b. | The operating cycle: |
The operating cycle of the Company
is
F-13
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| c. | Consolidated financial statements: |
The consolidated financial statements comprise the financial statements of companies that are controlled by the Company (Subsidiaries). Control of a company is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Potential voting rights are considered when assessing whether an entity has control over the other entity. The consolidation of the financial statements commences on the date on which control is obtained and ends when such control ceases.
The consolidated financial statements of the Company and of the Subsidiaries are prepared as of the same dates and periods. The consolidated financial statements are prepared using uniform accounting policies by all companies in the Group. Significant intra-Group balances and transactions and gains or losses resulting from intra-Group transactions are eliminated in full in the consolidated financial statements.
Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position.
| d. | Functional currency and foreign currency: |
The functional currency of the Company, which is the currency that best reflects the economic environment in which the Company operates and conducts its transactions is the U.S. Dollar (“USD” or “$”), since it’s the primary currency of the economic environment in which the Company operates. The consolidated financial statements are also presented in USD since the Company believes that preparing the consolidated financial statements in USD provides more relevant information to the users of the consolidated financial statements. Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Balances in non-U.S. dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-U.S. dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions exchange rates at transaction dates and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) historical exchange rates. Currency transaction gains and losses are presented in the financial income net, as appropriate.
| e. | Investment in joint arrangements: |
Joint arrangements are arrangements in which the Company has joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
| f. | Investments accounted for using the equity method: |
The Group’s investments in associates and joint ventures are accounted for using the equity method.
Under the equity method, the investment in the associate or in the joint venture is presented at cost with the addition of post-acquisition changes in the Group’s share of net assets, including other comprehensive income of the associate or the joint venture. Gains and losses resulting from transactions between the Group and the associate or the joint venture are eliminated to the extent of the interest in the associate or in the joint venture. The cost of the investment includes transaction costs.
F-14
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| f. | Investments accounted for using the equity method: (Cont.) |
The consolidated financial statements of the Company and of the associate or joint venture are prepared as of the same dates and periods. The accounting policies applied in the financial statements of the associate or the joint venture are uniform and consistent with the policies applied in the consolidated financial statements of the Group.
The equity method is applied until the loss of significant influence in the associate or loss of joint control in the joint venture or classification as investment held for sale.
| g. | Property and equipment, net: |
Property and equipment are measured at cost, including directly attributable costs, less accumulated depreciation, accumulated impairment losses and any related investment grants and excluding day-to-day servicing expenses.
Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows:
| % | Mainly % | |||||
| Lab equipment | ||||||
| Computers | ||||||
| Office furniture and equipment | ||||||
| Leasehold improvements | see below | - | ||||
Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term (including the extension option held by a company and intended to be exercised) and the expected life of the improvement.
| h. | Intangible assets: |
Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Expenditures relating to internally generated intangible assets, excluding capitalized development costs, are recognized in profit or loss when incurred.
Intangible assets with a finite useful life are amortized over their useful life and reviewed for impairment whenever there is an indication that the asset may be impaired. The amortization period and the amortization method for an intangible asset are reviewed at least at each year-end.
| i. | Impairment of non-financial assets: |
The Company evaluates the need to record an impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss.
F-15
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| j. | Financial instruments: |
| 1. | Financial assets: |
Financial assets are measured upon initial recognition at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets, except for financial assets measured at fair value through profit or loss in respect of which transaction costs are recorded in profit or loss.
The Company classifies and measures debt instruments in the consolidated financial statements based on the following criteria:
| - | The Company’s business model for managing financial assets; and |
| - | The contractual cash flow terms of the financial asset. |
| a) | Debt instruments are measured at amortized cost when: |
The Company’s business model is to hold the financial assets in order to collect their contractual cash flows, and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, the instruments in this category are measured according to their terms at amortized cost using the effective interest rate method, less any provision for impairment.
On the date of initial recognition, the Company may irrevocably designate a debt instrument as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency, such as when a related financial liability is also measured at fair value through profit or loss.
| b) | Equity instruments classified as fair value through profit and loss (“FVTPL”): |
Investments in equity instruments are classified as at FVTPL, unless the group designates an equity investment that is neither held for trading nor a contingent consideration arising from a business combination as at fair value through other comprehensive income on initial recognition.
F-16
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| j. | Financial instruments: (Cont.) |
| 2. | Impairment of financial assets: |
The Company evaluates at the end of each reporting period the loss allowance for financial debt instruments which are not measured at fair value through profit or loss. The Company distinguishes between two types of loss allowances:
| a) | Debt instruments whose credit risk has not increased significantly since initial recognition, or whose credit risk is low - the loss allowance recognized in respect of this debt instrument is measured at an amount equal to the expected credit losses within 12 months from the reporting date (12-month ECLs); or |
| b) | Debt instruments whose credit risk has increased significantly since initial recognition, and whose credit risk is not low - the loss allowance recognized is measured at an amount equal to the expected credit losses over the instrument’s remaining term (lifetime ECLs). |
The Company has short-term financial assets in respect of which the Company applies the simplified approach in IFRS 9 and measures the loss allowance in an amount equal to the lifetime expected credit losses.
The Company considers a financial asset in default when contractual payments are more than 180 days past due. However, in certain cases, the Company considers a financial asset to be in default when external or internal information indicates that the Company is unlikely to receive the outstanding contractual amounts in full.
| 3. | Financial liabilities: |
| a) | Financial liabilities measured at amortized cost: |
Financial liabilities are initially recognized at fair value less transaction costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities at amortized cost using the effective interest rate method, except for financial liabilities at fair value through profit or loss such as derivatives.
| b) | Financial liabilities measured at fair value through profit or loss: |
At initial recognition, the Company measures financial liabilities that are not measured at amortized cost at fair value. Transaction costs are recognized in profit or loss.
After initial recognition, changes in fair value are recognized in profit or loss.
F-17
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| j. | Financial instruments: (Cont.) |
| 4. | Compound financial instruments: |
Convertible debentures which contain both an equity/derivative component and a liability component are separated into two components. This separation is performed by first determining the liability component based on the fair value of an equivalent non-convertible liability. The value of the conversion component is determined to be the residual amount. Directly attributable transaction costs are apportioned between the equity component and the liability component based on the allocation of proceeds to the equity and liability components.
| 5. | Issue of a unit of securities: |
The issue of a unit of securities involves the allocation of the proceeds received (before issue expenses) to the securities issued in the unit based on the following order: financial derivatives and other financial instruments measured at fair value in each period. Then fair value is determined for financial liabilities that are measured at amortized cost. The proceeds allocated to equity instruments are determined to be the residual amount. Issue costs are allocated to each component pro rata to the amounts determined for each component in the unit.
| k. | Research and development expenditures: |
Research expenditures are recognized in profit or loss when incurred.
The conditions enabling capitalization of development costs as an asset have not yet been met and, therefore, all development expenditures are recognized in profit or loss when incurred.
| l. | Finance income and expenses: |
Finance income and expenses comprise interest income on amounts invested and exchange rate gains and losses. Interest income is recognized as it accrues using the effective interest method. Finance income and expenses derive also from changes in the fair value of financial liabilities measured at fair value through profit or loss. Borrowing costs are recognized in profit or loss using the effective interest method.
| m. | Fair value measurement: |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement is based on the assumption that the transaction will take place in the asset’s or the liability’s principal market, or in the absence of a principal market, in the most advantageous market.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
F-18
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| m. | Fair value measurement: (Cont.) |
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities measured at fair value or for which fair value is disclosed are categorized into levels within the fair value hierarchy based on the lowest level input that is significant to the entire fair value measurement:
| Level 1 | - | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
| Level 2 | - | Inputs other than quoted prices included within Level 1 that are observable directly or indirectly. | |
| Level 3 | - | Inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data). |
| n. | Taxes on income: |
Current or deferred taxes are recognized in profit or loss, except to the extent that they relate to items which are recognized in other comprehensive income or equity.
| 1. | Current taxes: |
A current tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date as well as adjustments required in connection with the tax liability in respect of previous years.
| 2. | Deferred taxes: |
Deferred taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts attributed for tax purposes.
Deferred taxes are measured at the tax rate that is expected to apply when the asset is realized, or the liability is settled, based on tax laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is not probable that they will be utilized. Deductible carryforward losses and temporary differences for which deferred tax assets had not been recognized are reviewed at each reporting date and a respective deferred tax asset is recognized to the extent that their utilization is probable.
Deferred taxes are offset if there is a legally enforceable right to offset a current tax asset against a current tax liability and the deferred taxes relate to the same taxpayer and the same taxation authority.
F-19
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| o. | Share-based payment transactions: |
The Company’s employees and other service providers may receive remuneration in the form of share-based payments (“Equity-settled transactions”).
Equity-settled transactions:
The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. The fair value is determined using an acceptable option pricing model (“OPM”). As for service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments granted.
The cost of equity-settled transactions is recognized in profit or loss together with a corresponding increase in equity during the period in which the performance and/or service conditions are to be satisfied ending on the date on which the relevant employees become entitled to the award (the “Vesting Period”).
If a grant of an equity instrument is cancelled, it is accounted for as if it had vested on the cancellation date and any expense not yet recognized for the grant is recognized immediately. However, if a new grant replaces the cancelled grant and is identified as a replacement grant on the grant date, the cancelled and new grants are accounted for as a modification of the original grant, as described above.
| p. | Earnings (loss) per share: |
Earnings (loss) per share are calculated by dividing the income (loss) attributable to equity holders of the Company by the weighted number of ordinary shares outstanding during the period.
Basic loss per ordinary share includes only ordinary shares that were outstanding during the period.
Potential ordinary shares are included in the computation of diluted loss per ordinary share when their conversion increases loss per ordinary share from continuing operations.
F-20
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| q. | Employee benefit liabilities: |
The Company has several employee-benefit plans:
| 1. | Short-term employee benefits: |
Short-term employee benefits are benefits that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related services. These benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.
| 2. | Post-employment benefits: |
The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans.
The Company has defined contribution plans to its employees according to the specific laws per country.
| r. | Provisions: |
A provision in accordance with IAS 37, “Provisions, Contingent Liabilities and Contingent Assets”, is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects part or all of the expense to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense is recognized in the statement of profit or loss net of any reimbursement.
Following are the types of provisions included in the financial statements:
Legal claims:
A provision for claims is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources embodying economic benefits will be required by the Company to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Government grants:
Government grants received from the Israel Innovation Authority (“IIA”) are recognized upon receipt as a liability if future economic benefits are expected from the research project, that will result in royalty-bearing sales.
If no economic benefits are expected from the research activity, the grant received is recognized as a reduction of the related research and development expenses. In that event, the royalty obligation is treated as a contingent liability in accordance with IAS 37.
At each reporting date, the Company evaluates whether there is reasonable assurance that the liability recognized, in whole or in part, will not be repaid (as the Company will not be required to pay royalties) based on the best estimate of future sales and using the original effective interest method.
F-21
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| s. | Inventories |
Inventories are stated at the lower of cost and net realizable value. Inventories are adjusted for estimated excess and obsolescence and written down to net realizable value based upon estimates of future demand, technology developments, and market conditions. Cost is determined in accordance with first-in, first-out Method (“FIFO”) and the cost of inventory includes shipment and freight costs.
| t. | Revenue recognition |
The Company’s sells products directly to customers mainly through the Brand’s online Amazon stores (see note 11).
Under the Company’s standard contract terms, customers have a right of return within 30 to 90 days. For contracts with rights of return, the Company recognizes revenue based on the amount of the consideration which the Company expects to receive for products which it is highly probable that a significant revenue reversal will not subsequently occur. The Company recognizes a refund liability for consideration received or receivable if it expects to refund some or all of the consideration to the customer. At the end of each reporting period, the Company updates its estimates of expected product returns and adjusts the refund liabilities with a corresponding adjustment in revenues. As of December 31, 2025, the allowance for returns was immaterial. The refund liability is recorded as a decrease in revenues against other payables. A right of return asset and corresponding adjustment to cost of sales is also recognized for the right to recover the goods from the customer.
In certain contracts, the Company evaluates the nature of its promise to the customer and determines whether it is the principal or agent for each contract. In determining the nature of its promise to the customer, the Company evaluates whether it is appropriate to recognize revenues on a gross or net basis based upon its evaluation of whether the Company obtains control of the specified goods by considering if it is primarily responsible for fulfillment of the promise, has inventory risk, and has the latitude in establishing pricing and selecting suppliers, among other factors. Based on its evaluation of these factors, management has determined that it is the principal in these arrangements; therefore, revenues are recorded on a gross basis.
| u. | Cost of revenues |
Cost of revenues primarily consist of expenses related to direct costs and freight.
| v. | Sales and marketing expenditures
Selling and marketing and expenses consist of online retailer services (including shipping and handling costs), warehouse costs and online advertising costs (i.e. sales and distribution variable expenses). Selling and marketing expenses are expensed as incurred. |
| w. | Cash and cash equivalents
In the consolidated statements of financial position, cash and bank balances comprise cash (i.e., cash on hand and demand deposits) and cash equivalents. Cash equivalents are short-term (generally with original maturity of three months or less), highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather for investment or other purposes.
Bank balances for which use by the Group is subject to third party contractual restrictions are included as part of cash unless the restrictions result in a bank balance no longer meeting the definition of cash. If the contractual restrictions to use the cash extend beyond 12 months after the end of the reporting period, the related amounts are classified as non-current in the statement of financial position. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above. |
| x. | Disclosure of new standards in the period prior to their adoption |
IFRS 18, “Presentation and Disclosure in Financial Statements”:
In April 2024, the IASB issued IFRS 18, “Presentation and Disclosure in Financial Statements” (“IFRS 18”) which replaces IAS 1, “Presentation of Financial Statements”.
As noted, IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements. In addition, some paragraphs from IAS 1 have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made minor amendments to IAS 7 and IAS 33, “Earnings per Share”.
F-22
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (CONT.) |
| x. | Disclosure of new standards in the period prior to their adoption (Cont.) |
IFRS 18 introduces new requirements to:
| ● | present specified categories and defined subtotals in the statement of profit or loss. |
| ● | provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements; and |
| ● | improve aggregation and disaggregation. |
An entity is required to apply IFRS 18 for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective when an entity applies IFRS 18. IFRS 18 requires retrospective application with specific transition provisions. The Company is currently evaluating the impact that application of IFRS 18 will have on its consolidated financial statements and related disclosures.
| NOTE 3:- | SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS |
In the process of applying the significant accounting policies, the Company has made the following judgments which have the most significant effect on the amounts recognized in the financial statements:
| Estimates and assumptions: |
The preparation of the financial statements requires management to make estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenues and expenses. Changes in accounting estimates are reported in the period of the change in estimate.
The key assumptions made in the financial statements concerning uncertainties at the reporting date and the critical estimates computed by the Company that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
| - | Legal claims: |
In estimating the likelihood of outcome of legal claims filed or threatened to commence against the Company and/or its Subsidiaries and/or affiliates, the Company relies on its management’s best knowledge and estimations and where applicable, on the opinion of their legal counsels. These estimates are based, among others, on management’s familiarity of and proximity to the circumstances, and also on the legal counsels’ best professional judgment, taking into account the stage of proceedings and legal precedents in respect of the different issues. Since the outcome of the claims might be determined in courts and/or other quasi-judicial tribunals, the results could differ from these estimates.
| - | Fair value of financial instruments: |
When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. The models are tested for validity by calibrating to prices from any observable current market transactions in the same instrument when available.
F-23
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 4:- | CASH AND CASH EQUIVALENTS |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash for immediate withdrawal - in USD | $ | $ | ||||||
| Cash for immediate withdrawal - in CAD | ||||||||
| Cash for immediate withdrawal - in NIS | ||||||||
| $ | $ | |||||||
| NOTE 5:- | INVENTORY |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Goods in transit | $ | $ | ||||||
| Finished goods | ||||||||
| $ | $ | |||||||
| NOTE 6:- | OTHER ACCOUNTS RECEIVABLE |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Government authorities | $ | $ | ||||||
| Other receivables | ||||||||
| Prepaid expenses | ||||||||
| Receivables in respect of downpayment on merger | ||||||||
| Related party | ||||||||
| $ | $ | |||||||
| NOTE 7:- | INVESTMENT IN ASSOCIATES |
MitoCareX Transaction
On March 10, 2022, the Company entered
into a Founders and Investment Agreement with Dr. Alon Silberman (the “MitoCareX Agreement”). Pursuant to the MitoCareX
Agreement, the Company invested an initial amount of $
On February 17, 2023, MitoCareX achieved its first milestone pursuant
to the MitoCareX Agreement. As a result of MitoCareX meeting this milestone, the Company invested an additional $
On November 25, 2023, MitoCareX achieved its second
milestone pursuant to the MitoCareX Agreement. As a result of MitoCareX meeting this milestone, the Company invested an additional sum
of $
On February 25, 2025, the Company entered into
a securities purchase and exchange agreement with Nexentis Technologies Inc. (“Nexentis”, formerly known as “N2OFF,
Inc.”) to sell its stake in the issued and outstanding shares of MitoCareX for $
As a result of the sale of its holdings in MitoCareX, the Company recorded
a gain from sale of an associate in the amount of $
The investment in MitoCareX was accounted for
as an equity method investment, in accordance with IAS 28, “Investment in Associates and Joint Ventures”. For the year
ended December 31, 2025, the Company recorded equity losses from the investment in MitoCareX in the amount of $
F-24
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 7:- | INVESTMENT IN ASSOCIATES (CONT.) |
| a. | MitoCareX Transaction (Cont.) |
The table below summarizes the changes in carrying value of the investment in MitoCareX:
| Balance at January 1, 2023 | $ | |||
| Investment following achievement of first milestone | ||||
| Equity losses from investment in MitoCareX | ( | ) | ||
| Balance at December 31, 2023 | $ | |||
| Investment following achievement of second milestone | ||||
| Equity losses from investment in MitoCareX | ( | ) | ||
| Balance at December 31, 2024 | $ | |||
| Equity losses from investment in MitoCareX | $ | ( | ) | |
| Investment in 2025 | ||||
| Sale of investment in MitoCareX | ( | ) | ||
| Balance at December 31, 2025 | $ |
| NOTE 8:- | INVESTMENT IN FINANCIAL ASSETS |
| a. | Clearmind |
On November 17, 2022, the Company invested
$
F-25
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 8:- | INVESTMENT IN FINANCIAL ASSETS (CONT.) |
| b. | AutoMax |
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 a 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
| c. | AutoMax Bridge Loans and Terminated Merger Agreement |
AutoMax Bridge Loans
On January 16, 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 $
Additional Loan Agreement
On February 27, 2025, the Company entered
into a loan agreement with AutoMax where a $
Terminated Merger Agreement
On April 10, 2024, the Company and AutoMax
entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which AutoMax’s shareholders and
a third party 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. Following these events, the Bridge Loan and Additional Loan became due immediately.
The Company has evaluated the probabilities of recovering the funds
extended to AutoMax in respect of the Bridge Loan and the Additional Loan and has determined that there is a
F-26
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 9:- | LEASES |
On April 1, 2024, the Company entered
into a two-year lease agreement for a total area of approximately
| NOTE 10:- | PROPERTY AND EQUIPMENT, NET |
| Computers | Office furniture and equipment | Right of use asses | Total | |||||||||||||
| Cost: | ||||||||||||||||
| Balance at January 1, 2025 | $ | |||||||||||||||
| Additions | ||||||||||||||||
| Disposals | ||||||||||||||||
| Balance at December 31, 2025 | ||||||||||||||||
| Accumulated depreciation: | ||||||||||||||||
| Balance at January 1, 2025 | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Disposals | ||||||||||||||||
| Balance at December 31, 2025 | ||||||||||||||||
| Depreciated cost at December 31, 2025 | ||||||||||||||||
| Balance at January 1, 2024 | $ | |||||||||||||||
| Additions | ||||||||||||||||
| Disposals | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance at December 31, 2024 | ||||||||||||||||
| Accumulated depreciation: | ||||||||||||||||
| Balance at January 1, 2024 | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Disposals | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Balance at December 31, 2024 | ||||||||||||||||
| Depreciated cost at December 31, 2024 | ||||||||||||||||
Depreciation expenses for the years
ended December 31, 2025, 2024 and 2023 amounted to $
| NOTE 11:- | INTANGIBLE ASSET |
On September 30, 2022, the Company announced the closing of the acquisition of WellutionTM, an Amazon.com Marketplace seller account (the “Brand”), American food supplements and cosmetics brand and trademark (the “Acquisition”). In connection with the Acquisition, the Company incorporated a new wholly owned Delaware subsidiary, SciSparc Nutraceuticals Inc. (“SNI”), to hold the new assets.
F-27
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 11:- | INTANGIBLE ASSET (CONT.) |
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 $
For the years ended December 31, 2023, 2024 and 2025, the Brand recorded
significant losses. As of December 31, 2025, 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 table below summarizes the carrying value of the intangible asset:
| Balance at January 1, 2023 | $ | |||
| Loss on impairment of intangible asset | ( | ) | ||
| Amortization of intangible asset | ( | ) | ||
| Balance at December 31, 2023 | $ | |||
| Loss on impairment of intangible asset | ( | ) | ||
| Amortization of intangible asset | ( | ) | ||
| Balance at December 31, 2024 | $ | |||
| Loss on impairment of intangible asset | ( | ) | ||
| Amortization of intangible asset | ( | ) | ||
| Balance at December 31, 2025 | $ |
| NOTE 12:- | TRADE PAYABLES |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Accrued expenses | $ | $ | ||||||
| Open debts | ||||||||
| $ | $ | |||||||
F-28
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 13:- | OTHER PAYABLES |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Employees and payroll accruals | $ | $ | ||||||
| Accrued vacation | ||||||||
| $ | $ | |||||||
| NOTE 14:- | FINANCIAL INSTRUMENTS |
| a. | 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” (“IFRS 9”):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Financial assets: | ||||||||
| Cash, cash equivalents and restricted deposits | $ | $ | ||||||
| Current maturities of long-term loan | ||||||||
| Other receivables | ||||||||
| Related parties | ||||||||
| Total financial assets at amortized cost | ||||||||
| Investments in financial assets at fair value | ||||||||
| Financial liabilities: | ||||||||
| Credit from others | ||||||||
| Loans | ||||||||
| Lease liability | ||||||||
| Total financial and lease liabilities | $ | $ | ||||||
F-29
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 14:- | FINANCIAL INSTRUMENTS (CONT.) |
| a. | Classification of financial assets and financial liabilities: (Cont.) |
The following table presents the Level 1-3 financial instruments as of December 31, 2025, and 2024:
| Carrying amount | Fair Value | |||||||||||||||
| December 31, | December 31, 2025 | |||||||||||||||
| 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Investments in short-term financial assets | $ | $ | $ | $ | ||||||||||||
| Investments in financial assets | $ | $ | $ | $ | ||||||||||||
| Current maturities of long-term loan (see note 8c) | $ | $ | $ | $ | ||||||||||||
| Carrying amount | Fair Value | |||||||||||||||
| December 31, | December 31, 2024 | |||||||||||||||
| 2024 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Investments in short-term financial assets | $ | $ | $ | $ | ||||||||||||
| Investments in financial assets | $ | $ | $ | $ | ||||||||||||
| Loans to a related party (see note 8c) | $ | $ | $ | $ | ||||||||||||
Investments in short-term financial assets consist of an investment in Polyrizon Ltd. pre-funded warrants (see Note 24g).
Investments in financial assets consist of investments in Nexentis, AutoMax, Nexera (as defined in Note 18e) and Clearmind (refer to notes 7, 8b, 24d and 8a, respectively).
Management believes that the carrying amount of cash, short-term deposits, trade receivables, trade payables, and other current liabilities approximate their fair value due to the short-term maturities of these instruments.
For changes in the fair values of financial instruments measured at fair value through profit refer to Note 21.
| b. | Financial risk factors: |
The Company’s activities expose it to various financial risks such as market risks (foreign currency risk and interest risk), credit risk and liquidity risk. The Company’s comprehensive risk management plan focuses on activities that reduce to a minimum any possible adverse effects on the Company’s financial performance.
Risk management is performed by management in accordance with the policies approved by the Board. The Board establishes written principles for the overall risk management activities as well as specific policies with respect to certain exposures to risks such as exchange rate risk, credit risk and the investments of surplus funds.
| 1. | Market risks: |
Foreign currency risk:
The Company is exposed to exchange rate risk resulting from the exposure to different currencies, mainly from transactions in NIS and CAD. Exchange rate risk arises from recognized liabilities that are denominated in a foreign currency other than the functional currency. The exchange rate risk arising from NIS and CAD balances are immaterial as the substantial amount of the monetary items is denominated in USD.
F-30
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 14:- | FINANCIAL INSTRUMENTS (CONT.) |
| b. | Financial risk factors: (Cont.) |
| 2. | Credit risks: |
All cash and restricted deposits related to the Company are held in two banks in Israel which are considered financially solid.
| 3. | Liquidity risk: |
The Company monitors the risk of a shortage of funds on a regular basis and acts to raise funds to satisfy its liabilities. As of December 31, 2025, the Company expects to settle all of its financial liabilities in less than one year.
The carrying amounts of cash and restricted deposits, and all other financial assets and liabilities approximate their fair value.
Below is an analysis of contractual maturities of financial liabilities, including estimated interest payments and the effect of discounting, as at December 31, 2025 and 2024:
| Carrying Amount | Contractual Cash flow | 1 year | 2-5 years | |||||||||||||
| December 31, 2025 | ||||||||||||||||
| Accounts payable | ||||||||||||||||
| Other payables | - | |||||||||||||||
| Related parties | ||||||||||||||||
| Current maturities of long-term loans | ||||||||||||||||
| Accrued legal contingency | ||||||||||||||||
| Carrying Amount | Contractual Cash flow | 1 year | 2-5 years | |||||||||||||
| December 31, 2024 | ||||||||||||||||
| Accounts payable | ||||||||||||||||
| Other payables | ||||||||||||||||
| Lease liability | ||||||||||||||||
| Accrued legal contingency | ||||||||||||||||
The table below presents the change in the Company’s financial instruments as of December 31, 2025:
| Fair value measurements using input type | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Balance as of January 1, 2025 | ||||||||||||||||
| Loan to related party | ||||||||||||||||
| Interest on loan | ||||||||||||||||
| Impairment of loan | ( | ) | ( | ) | ||||||||||||
| Change in fair value | ||||||||||||||||
| Balance as of December 31, 2025 | ||||||||||||||||
F-31
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 15:- | EMPLOYEE BENEFIT LIABILITIES |
Employee benefits consist of short-term benefits and post-employment benefits.
Post-employment benefits:
According to the labor laws and the Israeli Severance Pay Law, 1963 (the “Severance Pay Law”), the Company is required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to Section 14 of the Severance Pay Law, as specified below. The Company’s obligation to pay such compensation is accounted for as a post-employment benefit. The computation of the Company’s employee benefit liability is made in accordance with a valid employment contract based on the employee’s salary and employment term which establish the entitlement to receive the compensation.
The post-employment benefits are normally financed by contributions classified as defined benefit plans or as defined contribution plans as detailed below.
Defined contribution plans:
The Severance Pay Law applies to a substantial part of the compensation
payments, pursuant to which the fixed contributions paid by the Company into pension funds and/or policies of insurance companies release
the Company from any additional liability to employees for whom said contributions were made.
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Expenses in respect of defined contribution plans | $ | $ | $ | |||||||||
| NOTE 16:- | TAXES ON INCOME |
| a. | Tax rates applicable to the Company: |
The Israeli statutory corporate tax rate and real capital gains tax
rate were
| b. | Tax assessments: |
The assessments of the Company are deemed final through the 2019 tax year.
| c. | Carryforward tax losses and other temporary differences: |
The Company has accumulated tax losses since its inception.
As of December 31, 2025, the Company’s
net carryforward tax losses are estimated to be approximately $
F-32
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 17:- | CONTINGENT LIABILITIES, COMMITMENTS, CLAIMS AND LIENS |
| a. | License Agreement with Dekel Pharmaceuticals Ltd.: |
In May 2015, the Company entered into an exclusive, irrevocable, worldwide license agreement with Dekel for certain technology and one granted U.S. patent related to compositions and methods for treating inflammatory disorders (the “Dekel License Agreement”). The Dekel License Agreement became effective in August 2015.
On February 16, 2025, the Dekel License Agreement was terminated, as part of a settlement of a lawsuit filed against SciSparc’s former directors, effective as of February 5, 2024. In accordance with the settlement, SciSparc retained its exclusive global rights to its intellectual property portfolio, patents, know-how and technologies and was released from all alleged commitments, claims and royalties related or arising out of the Dekel License Agreement, including those related to claimed core technologies, and Dekel assumed full and exclusive ownership of the patent application for compositions and methods for treating inflammatory disorders and all such underlying intellectual property.
| b. | License Agreement with Yissum Research Development Company of the Hebrew University of Jerusalem Ltd. (“Yissum”): |
On July 29, 2018, the Company entered into an exclusive, worldwide, sublicensable, royalty-bearing license with Yissum for a license to make commercial use of the licensed technology, in order to develop, obtain regulatory approvals, manufacture, market, distribute or sell products, all within the field and the territory only, as determined in the agreement (the “Yissum License Agreement”). According to the Yissum License Agreement, the Company shall pay Yissum royalties at the rates of future net sales, subject to the royalty reductions as described in the Yissum License Agreement. The Company is also obligated to pay sublicense fees out of the sublicense consideration. All rights, title and interest in and to the Yissum License Agreement shall vest solely in Yissum, and the Company shall hold and make use of the rights granted. All rights in the development results shall be solely owned by the Company, except to the extent that an employee of Yissum, including the researcher, is considered an inventor of a patentable invention arising from the development results, in which case such invention and all patent applications and/or patents claiming such invention shall be owned jointly by the Company and Yissum, as appropriate, and Yissum’s share in such joint patents shall be automatically included in the Yissum License Agreement.
| c. | Agreement with Hannover Medical School: |
On August 13, 2018, the Company entered
into an agreement with Hannover Medical School to conduct a clinical study to evaluate the safety, tolerability and efficacy of daily
oral SCI-110 in treating adults with Tourette syndrome, which agreement was subsequently updated on December 2, 2021, in an estimated
amount of $
| d. | Agreement with Yale University:
On July 27, 2022, the Company entered into an agreement with Yale University to conduct a clinical investigation and laboratory services for a randomized, double-blind, placebo-controlled, cross over study to evaluate the safety, tolerability and efficacy of daily oral SCI-110 in treating adults with Tourette syndrome in treating approximately 10 Tourette syndrome subjects aged 18 to 65. The total estimated amount of the agreement is approximately $ |
F-33
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 17:- | CONTINGENT LIABILITIES, COMMITMENTS, CLAIMS AND LIENS (CONT.) |
| e. | On May 2, 2023, Capital Point Ltd. (“Capital Point”) filed with the Tel Aviv-Jaffa District Court (the “Court”) a suit against the Company (the “Suit”). | |
| The Suit challenges a certain warrant issued by the Company to Capital Point (the “Capital Point Warrant”) to purchase ordinary shares of the Company in the amount of $ | ||
| The Suit claims damages in the amount of NIS | ||
As of the Approval Date the Company believes
it is unlikely that the outcome of the lawsuit exceeds the $ |
| f. | Government grants:
The Company received research and development grants from the IIA. See also Note 2r. If no economic benefits are expected from the research activity, the royalty obligation is not recorded as a liability and instead is treated as a contingent liability in accordance with IAS 37.
During 2015-2017, the Company received IIA royalty-bearing grants totaling approximately $ |
| NOTE 18:- | EQUITY |
| a. |
| December 31, 2025 | December 31, 2024 | |||||||||||||||
| Authorized | Issued and outstanding | Authorized | Issued and outstanding | |||||||||||||
| Number of shares | ||||||||||||||||
| Ordinary shares | ||||||||||||||||
F-34
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 18:- | EQUITY (CONT.) |
| a. | Composition of share capital: (Cont.) |
Reverse Share Splits
On September 28, 2023, July 3, 2025
and February 5, 2026, the Company effected one-for-twenty six (
Consequently, all share and per share data included in these consolidated financial statements for all periods preceding the effective dates of the reverse share splits have been adjusted to reflect the reverse splits’ ratios in these consolidated financial statements for all periods presented.
| b. | Changes in share capital: |
Issued and outstanding share capital:
| Number of ordinary shares | ||||
| Balance at January 1, 2024 | ||||
| Issuance of share capital – in respect of exercise of October 2023 pre-funded warrants (Note 18g) | ||||
| Shares issued to consultants (Note 19(a)(3)) | ||||
| Issuance of share capital – in respect of January 2024 SEPA (Note 18(h)) | ||||
| Balance at December 31, 2024 | ||||
| Shares issued to consultants in respect of exercised restricted share units (“RSUs”) (Note 18e) | ||||
| Exercise of convertible debentures (Note 18i) | ||||
| Exercise of warrants (Note 18j) | ||||
| Issuance of shares in a registered direct offering (Note 18k) | ||||
| Shares issued to consultants (Note 19(a)(3)) | ||||
| Rounding shares | ||||
| Balance at December 31, 2025 | ||||
F-35
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 18:- | EQUITY (CONT.) |
| c. | Rights attached to shares: |
Voting rights at the shareholders meeting, 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 issuances of ordinary shares: |
On March 22, 2023, the Company issued
| f. | August 2023 Financing Round |
On August 14, 2023, the Company closed
an underwritten public offering (the “2023 Public Offering”) of
F-36
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 18:- | EQUITY (CONT.) |
| g. | 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 year ended December 31,
2024, the Company issued
| h. | 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 the Company’s ordinary shares in the amount of up to $
In connection with the SEPA, the Company
may request pre-paid advances of the Commitment Amount, in an amount of up to $
In addition, pursuant to the SEPA,
the Company issued to YA an aggregate of
F-37
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 18:- | EQUITY (CONT.) |
| i. | August 2025 convertible debenture exercises | |
| On February 25, 2025, the Company entered into securities purchase
agreements (the “Securities Purchase Agreements”) with certain investors, pursuant to which the Company sold convertible debentures
(the “Debentures”) in the aggregate principal amount of $ | ||
| In August 2025, certain investors under the Securities Purchase Agreements,
submitted to the Company conversion notices to convert outstanding principal and accrued interest of certain Debentures, pursuant to which
the Company issued an aggregate of | ||
As a result of issuance and conversion of the Debentures, the Company
recorded net finance expense of $ |
| j. | September 2025 Warrant exercises | |
| At the closing of the Securities Purchase Agreements (see note 18i
above), the Company issued to the investors | ||
| On September 26, 2025, the Company entered into inducement offer letter
agreements (the “Inducement Letters”) with holders (the “Holders”) of certain of the existing warrants to purchase
in the aggregate up to | ||
As a result of issuance and exercise of the Existing Warrants, which
were measured at fair value from the date of issuance until exercise, the Company recorded net finance income of $ |
| k. | November 2025 Registered Direct Offering | |
| On November 27, 2025, the Company entered into a securities purchase
agreement with certain institutional and accredited investors, providing for the issuance of an aggregate of |
| l. | Warrants | |
| Warrants | Warrant Term | Exercise Price | Exercisable | |||||||||
| March 2021 Series A Warrants | USD | |||||||||||
| March 2021 Series B Warrants | USD | |||||||||||
| May 2022 Warrants | USD | |||||||||||
F-38
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 19:- | SHARE-BASED PAYMENT TRANSACTIONS |
| a. | The cost of share-based payment recognized in the consolidated financial statements: |
The expenses due to share-based compensation for the years ended December 31, 2025, 2024 and 2023, recognized in the consolidated financial statements in respect of the share option plan of the Company are shown in the following table, detailed by expense classification:
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Research and development expenses | $ | $ | $ | |||||||||
| General and administrative expenses | ||||||||||||
| $ | $ | $ | ||||||||||
| 1. | The 2015 ESOP and 2023 Plan: |
On December 28, 2023, the Board adopted the 2023 Share Incentive Plan (the “2023 Plan”).
The Company no longer grants any awards under the 2015 ESOP as it was superseded by the 2023 Plan, although previously granted awards under the 2015 ESOP remain outstanding and subject to the 2015 ESOP. Under the 2023 Plan, the Company may grant its employees and other service providers equity-based incentive awards (“Share Options”).
On December 28, 2023, the Board approved
to reserve for issuance under the 2023 Plan
| 2. | During the year ended December 31, 2025, share-based compensation in respect of Share Options of $ |
| 3. | During the years ended
December 31, 2025 and 2024, the Company issued consultants |
F-39
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 19:- | SHARE-BASED PAYMENT TRANSACTIONS (CONT.) |
| b. | Movement during the year: |
| 1. |
| Number of Share Options | Weighted average exercise price | |||||||
| USD | ||||||||
| 2025: | ||||||||
| Share Options outstanding at the beginning of the year | ||||||||
| Share Options outstanding at the end of the year | ||||||||
| Share Options exercisable at the end of the year | ||||||||
| 2024: | ||||||||
| Share Options outstanding at the beginning of the year | ||||||||
| Share Options outstanding at the end of the year | ||||||||
| Share Options exercisable at the end of the year | ||||||||
| 2. | The weighted average remaining contractual life of the Share Options outstanding was |
| 3. | The range of exercise prices of Share Options outstanding at the end of the year was $ |
F-40
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 19:- | SHARE-BASED PAYMENT TRANSACTIONS (CONT.) |
| c. | Restricted Share Units: |
RSU transactions for the years ended December 31, 2025, and 2024 are as follows:
| Number | ||||
| Balance, January 1, 2024 | ||||
| RSUs granted | ||||
Vesting of RSUs | ||||
| Balance, December 31, 2024 | ||||
Vesting of RSUs | ( | ) | ||
| RSUs granted | ||||
| Balance, December 31, 2025 | ||||
There were no RSUs that are vested and not issued as of December 31,
2025. For the year ended December 31, 2025, share-based compensation in respect of RSUs of $
| NOTE 20:- | COST OF REVENUES |
The following table discloses the breakdown of our cost of revenues for the periods set forth below:
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Purchased goods | $ | $ | $ | |||||||||
| Freight | ||||||||||||
F-41
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 21:- | ADDITIONAL INFORMATION TO THE ITEMS OF PROFIT OR LOSS |
| Year ended December 31, | |||||||||||||
| 2025 | 2024 | 2023 | |||||||||||
| a. | Research and development expenses: | ||||||||||||
| Wages and related expenses | $ | $ | $ | ||||||||||
| Share-based payment | |||||||||||||
| Regulatory, professional and other expenses | |||||||||||||
| Research and preclinical studies | |||||||||||||
| Clinical studies | |||||||||||||
| Chemistry and formulations | |||||||||||||
| b. | Sales and marketing expenses: | ||||||||||||
| Advertising | $ | $ | $ | ||||||||||
| Amazon fees | |||||||||||||
| Amortization | |||||||||||||
| Storage and shipping | |||||||||||||
| Management fees | |||||||||||||
| c. | General and administrative expenses: | ||||||||||||
| Wages and related expenses | |||||||||||||
| Share-based payment | |||||||||||||
| Professional and directors’ fees | |||||||||||||
| Deemed issuance listing expenses | |||||||||||||
| Business development expenses | |||||||||||||
| Regulatory expenses | |||||||||||||
| Office maintenance, rent and other expenses | |||||||||||||
| Investor relations and business expenses | |||||||||||||
| 6,371 | 4,526 | 3,844 | |||||||||||
| d. | Other income, net: | ||||||||||||
| Loss from sale of property and equipment | |||||||||||||
| Gain on settlement of legal dispute | ( | ) | |||||||||||
| Other income | ( | ) | |||||||||||
| Gain on sale of patent license, net (net of Polyrizon Ltd. holdings sold) (See also Note 24g) | ( | ) | |||||||||||
| ( | ) | ( | ) | ||||||||||
| e. | Finance income: | ||||||||||||
| Net change in fair value of financial liabilities designated at fair value through profit or loss | ( | ) | ( | ) | ( | ) | |||||||
| Finance income due to cancellation of warrant liability | ( | ) | |||||||||||
| Finance income due to revaluation of convertible debentures | ( | ) | |||||||||||
| Interest from loans to related parties and deposits | ( | ) | ( | ) | |||||||||
| Exchange rate differences | ( | ) | ( | ) | |||||||||
| ( | ) | ( | ) | ( | ) | ||||||||
| f. | Finance expenses: | ||||||||||||
| Impairment of loan (see note 8c) | |||||||||||||
| Issuance expenses | |||||||||||||
| Exchange rate differences | |||||||||||||
| Losses from remeasurement of investment in financial assets | |||||||||||||
| Finance expense in respect of leases | |||||||||||||
| Finance expenses from interest and commissions | |||||||||||||
| $ | $ | $ | |||||||||||
F-42
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 22:- | LOSS PER SHARE |
| a. |
| Year ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Amounts used in the computation of basic and diluted loss | Weighted number of shares | Loss | Weighted number of shares | Loss | Weighted number of shares | Loss | ||||||||||||||||||
| USD | USD | USD | ||||||||||||||||||||||
| Continuing operations: | ||||||||||||||||||||||||
| Basic loss per share | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Effect of potential dilutive ordinary shares | ||||||||||||||||||||||||
| Basic and diluted loss per share | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| b. | The computation of diluted loss per share did not include the following dilutive potential ordinary shares since their inclusion would decrease the loss per share (anti-dilutive effect): |
| 1. |
| 2. |
| 3. |
F-43
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 23:- | 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) of each segment in the consolidated 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. His 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 CEO of the Company.
| Year ended December 31, 2025 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| Research and development expenses | ||||||||||||
| Sales and marketing | ||||||||||||
| Impairment of intangible assets | ||||||||||||
| General and administrative expenses | ||||||||||||
| Other income, net | ( | ) | ( | ) | ||||||||
| Segment loss | ||||||||||||
| Company’s share of losses of company accounted for at equity, net | ||||||||||||
| Gain from sale of an associate | ( | ) | ||||||||||
| Finance expense, net | ||||||||||||
| Loss | ||||||||||||
F-44
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 23:- | OPERATING SEGMENTS (CONT.) |
| Year ended December 31, 2024 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| Research and development expenses | ||||||||||||
| Sales and marketing | ||||||||||||
| Impairment of intangible assets | ||||||||||||
| General and administrative expenses | ||||||||||||
| Other income, net | ( | ) | ( | ) | ||||||||
| Segment loss (gain) | ||||||||||||
| Equity losses from the investment in MitoCareX | ||||||||||||
| Finance expense (income), net | ( | ) | ||||||||||
| Tax income | ( | ) | ||||||||||
| Loss | ||||||||||||
| Year ended December 31, 2023 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Revenues | ||||||||||||
| External | $ | $ | $ | |||||||||
| Total | ||||||||||||
| Cost of revenues | ||||||||||||
| Research and development expenses | ||||||||||||
| Sales and marketing | ||||||||||||
| Impairment of intangible assets | ||||||||||||
| General and administrative expenses | ||||||||||||
| Other income, net | ||||||||||||
| Segment loss (gain) | ||||||||||||
| Company’s share of losses of company accounted for at equity, net | ||||||||||||
| Finance expense (income), net | ( | ) | ||||||||||
| Tax expense | ||||||||||||
| Loss | ||||||||||||
F-45
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 23:- | OPERATING SEGMENTS (CONT.) |
Drug Development Segment
For the year ended December 31, 2024, the Company recognized other
income in the amount of $
Online Sales Segment
For the years ended December 31, 2023, 2024 and 2025, the Brand recorded
significant losses. As of December 31, 2025, 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 $
| As of December 31, 2025 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Segment assets | $ | $ | $ | |||||||||
| Segment liabilities | $ | $ | $ | |||||||||
| As of December 31, 2024 | ||||||||||||
| Drug Development | Online Sales | Total | ||||||||||
| Segment assets | $ | $ | $ | |||||||||
| Segment liabilities | $ | $ | $ | |||||||||
F-46
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 24:- | TRANSACTIONS AND BALANCES WITH RELATED PARTIES |
| a. |
| December 31, 2025 | December 31, 2024 | |||||||||||||||
| Key management personnel | Other related parties | Key management personnel | Other related parties | |||||||||||||
| AutoMax bridge loans (see note 8c) | $ | $ | $ | $ | ||||||||||||
| Other current assets | $ | $ | $ | $ | ||||||||||||
| Current liabilities (see note 24e) | $ | $ | $ | $ | ||||||||||||
| Non-current liabilities | $ | $ | $ | $ | ||||||||||||
| b. |
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Research and development expenses | $ | $ | $ | |||||||||
| Sale of non-controlling interest in subsidiary | $ | $ | $ | |||||||||
| c. |
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Short-term benefits | $ | $ | $ | |||||||||
| Management fees (see also note 24d) | $ | $ | $ | |||||||||
| Cost of share-based payment | $ | $ | $ | |||||||||
| d. | Pursuant to the purchase of the Wellution brand (refer to note 11),
Nexera and SciSparc U.S. entered into a consulting agreement, pursuant to which Nexera provides management services to SciSparc US for
the Wellution brand for a monthly fee of $ |
F-47
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 24:- | TRANSACTIONS AND BALANCES WITH RELATED PARTIES (CONT.) |
In addition, during 2023 the Company and Nexera engaged in a mutual
share exchange in the amount of $ | ||
| Mr. Oz Adler, the Company’s Chief Executive Officer and Chief Financial Officer, is the chairman of the board of directors of Nexera. | ||
| e. | On March 7, 2022, the Company entered into the Cooperation Agreement
with Clearmind, a company in which Dr. Adi Zuloff-Shani, the Company’s Chief Technologies Officer, Mr. Weiss, the Company’s
President, and Mr. Adler, the Company’s Chief Executive Officer and Chief Financial Officer serve as officers and directors (the
“Cooperation Agreement”). For the years ended December 31, 2025 and 2024, the Company recognized expenses in respect
of the Cooperation Agreement in the amount of $ | |
| On November 17, 2022, the Company invested $ |
| f. | Mr. Amitai Weiss, one of the Company’s directors, was formerly chairman of the board of directors of AutoMax (see Note 8b). |
| g. | On August 13, 2024, the Company entered into the license agreement (the “License Agreement”) of the out-licensing of its SCI-160 program (the “Assets”), with Polyrizon Ltd. (the “Licensee” or “Polyrizon”). According to the License Agreement, the Company granted the Licensee a royalty-bearing, exclusive, sub-licensable right and license to the Assets (the “License”). In consideration for the License, the Company received and will receive certain shares of the Licensee, reflecting an issue price of $
Pursuant to the terms of the License Agreement, the Company is entitled to up to $
On October 31, 2024, following an initial public offering of the Licensee, the Company received
On December 30, 2024, pursuant to a share transfer agreement, the Company sold all of the Licensee ordinary shares and pre-funded warrants held by it to a third party, 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 $
As of December 31, 2025, the Company holds
Mr. Oz Adler, the Company’s Chief Executive Officer, is Chairman of the board of directors of Polyrizon. |
F-48
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 25:- | SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
Transaction with NeuroThera Labs
On October 9, 2025, the Company entered into an asset and share purchase agreement (the “Miza Agreement”) with Miza III Ventures Inc. (TSXV: MIZA.P)(“Miza”), pursuant to which, on the terms and subject to the conditions of the Miza Agreement, the Company received a controlling interest in Miza, and transferred to Miza its clinical-stage pharmaceutical portfolio and equity stake of approximately
As of December 31, 2025, the Company held
The Transaction closed on October 22, 2025, and pursuant to the Miza Agreement, at the closing thereof (the “Closing”) the Company transferred to Miza
Pursuant to the Miza Agreement, upon the achievement of the Milestones, the Contingent Right Shares will be issued to the Company as follows: (i)
Upon Closing, two parties have provided Miza non-convertible loans in the amount of $
The financial statements of Miza are consolidated
in these financial statements from the Closing Date, and the Miza Agreement was accounted for as deemed issuance of shares by a subsidiary.
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 the financial statements of Miza, the Miza Agreement was accounted for as a reverse acquisition where SNI
was identified as the accounting acquirer. Additionally, Miza did not meet the definition of a business in IFRS 3, “Business Combinations.”
Accordingly, in the consolidated financial statements of the Company the agreement was accounted for as deemed issuance of
The deemed issuance listing expense related to
the Transaction has been recorded in profit or loss and measured as the excess of fair value of the
The
For further information regarding the assets and liabilities received as consideration for deemed issuance of shares, see appendix (b) to the consolidated statements of cash flows.
In addition, on October 23, 2025, the Company loaned CAD |
F-49
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 26:- | EVENTS AFTER THE REPORTING DATE |
| The Company has evaluated subsequent events from December 31, 2025 through April 29, 2026, the date of approval of these consolidated financial statements by the board of directors. |
| a. | On January 26, 2026, the Company closed acquisition of the complete
portfolio of patents, trademarks, know-how, brand names and related intellectual property rights, including unregistered intellectual
property rights, owned by Xylo Technologies Ltd. (“Xylo”) for pre-funded warrants to purchase |
| b. | On January 13, 2026, the Company entered into a securities purchase
agreement with certain institutional and accredited investors, providing for the issuance of an aggregate of |
| c. | On February 12, 2026, the Company entered into a securities purchase
agreement (the “SPA”) with an institutional investor (the “February 2026 Holder”). Pursuant to the SPA, the Company
may issue and sell, from time to time, convertible promissory notes (the “February 2026 Notes”), in the aggregate principal
amount of up to $
Subject to the conditions in the SPA, beginning on April, 1, 2026,
the Company may request, at its sole discretion, that the Holder purchase additional February 2026 Notes, each in the principal amount
of up to $
In addition, under the terms and conditions of the SPA, concurrently
with the issuance of each note, the Company shall issue to the Holder, for no additional consideration, an accompanying warrant to purchase
the ordinary shares, representing a warrant coverage of
Thus, at the Initial Closing, the Company issued to the February 2026
Holder a warrant to purchase up to | |
| d. | On February 5, 2026, the Company announced that it intends to effect the Fifth Reverse Share Split of the Company’s issued and outstanding ordinary shares, effective on March 4, 2026. Consequently, all share numbers, share prices, and exercise prices have been retroactively adjusted in these consolidated financial statements for all periods presented. The Fifth Reverse Share Split was approved by the Company’s shareholders at the Company’s annual general meeting of shareholders held on June 26, 2025, to be effected at the board of directors’ discretion within the approved parameters. |
F-50
SCISPARC LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
USD in thousands (except share data)
| NOTE 26:- | EVENTS AFTER THE REPORTING DATE (CONT.) |
| e. | On February 28, 2026, a joint military operation (the “Operation”) commenced by the United States and Israel involving attacks in Iran. In response, Iran launched ballistic missiles and unmanned aerial vehicles toward Israel and certain states in the Persian Gulf region. These events have resulted in civilian casualties and property damage in Israel. Additionally, Hezbollah, a terrorist organization in Lebanon, joined the attacks against Israel and Israel has started military operations in Lebanon.
Following the commencement of the Operation, Israel’s Home Front Command announced a “special home front situation” and updated safety guidelines that include, among other measures, restrictions on passenger flights, limitations on gatherings, broad reserve recruitment, and temporary closure of certain businesses, which has contributed to a partial reduction in economic activity. | |
| Subject to the continuation and/or escalation of the Operation, and given its adverse impact on economic conditions in Israel, management expects the Operation to have a negative effect on the Company. Because this is an ongoing event and there is uncertainty regarding its duration, nature, and scope, management is unable to reasonably estimate the extent of the impact at this time. | ||
| f. | On March 10, 2026, the Company announced that NeuroThera, in which the Company holds a controlling interest of approximately
Under the CliniQ SPA, NeuroThera will acquire
In consideration for the Purchased Shares, NeuroThera will issue an
aggregate of
In addition to the Consideration Shares, the Selling Shareholders may be entitled to receive earn-out payments of up to $
Closing of the Transaction is expected to occur within 30 days following the submission of the application for the Israeli tax ruling to the Israeli Tax Authority, subject to satisfaction or waiver of all closing conditions. The closing of the Transaction is anticipated to be on or about May 15, 2026, unless otherwise agreed by the parties in writing. |
F-51