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SciSparc Ltd 6-K, filed Aug 16, 2021

SciSparc Ltd. (SPRC)

6-K 2021-08-16 For: 2021-08-15
View Original
Added on April 11, 2026

About this 6-K

SciSparc Ltd filed this 6-K on August 16, 2021.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

For the month of: August 2021 (Report No. 3)

Commission file number: 001- 38041

SCISPARC LTD.

(Translation of registrant’s name into English)

20 Raul Wallenberg Street, Tower A,

Tel Aviv 6971916, Israel

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒       Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(1):_____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(7):_____

CONTENTS

This Report of Foreign Private Issuer on Form 6-K consists of (i) the Registrant’s Unaudited Consolidated Interim Financial Statements as of June 30, 2021, which is attached hereto as Exhibit 99.1; and (ii) the Registrant’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2021, which is attached hereto as Exhibit 99.2.

This Report on Form 6-K is incorporated by reference into the registration statements on Form F-3 (File No. 333-225745 and File No. 333-233417) and on Form S-8 (File No. 333-225773) of the Company, filed with the Securities and Exchange Commission, to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

Exhibit No.
99.1 SciSparc Ltd.’s Unaudited Consolidated Interim Financial Statements as of June 30, 2021.
99.2 SciSparc Ltd.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 2021. 
1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SciSparc Ltd.
Date: August 16, 2021 By /s/ OzAdler
Name: Oz Adler
Title: Chief Financial Officer

2

Exhibit 99.1

SCISPARC LTD.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2021

UNAUDITED

INDEX

Page
Consolidated Statements of Financial Position 2-3
Consolidated Statements of Profit or Loss and Other Comprehensive Loss 4
Consolidated Statements of Changes in Equity (Deficit) 5-7
Consolidated Statements of Cash Flows 8-10
Notes to Interim Consolidated Financial Statements 11-17

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF FINANCIAL POSITION

June 30, December 31,
2021 2020 2020
Unaudited Audited
Note in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 144 $ 1,946
Restricted deposit 34 10
Other accounts receivable 632 594
810 2,550
NON-CURRENT ASSETS:
Investment in associate 742 -
Property and equipment, net 41 11
783 11
$ 1,593 $ 2,561

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

2

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF FINANCIAL POSITION

June 30, December 31,
2021 2020 2020
Unaudited Audited
Note in thousands
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables $ 1,108 $ 556
Other accounts payable 65 34
Short-term loan 61 188
Convertible component 3b 397 -
Warrants - 353
1,637 1,131
NON- CURRENT LIABILITIES:
Warrants 3b, 4b 598 -
598 -
EQUITY (DEFICIT) ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: 4
Share capital and premium 47,721 49,040
Reserve from share-based payment transactions 4,872 4,315
Warrants - 2,207
Foreign currency translation reserve 497 497
Transactions with non-controlling interests 559 559
Accumulated deficit ) (54,344 ) (55,188 )
(695 ) 1,430
Non-controlling interests 53 -
Total equity (deficit) (642 ) 1,430
$ 1,593 $ 2,561

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

3

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE LOSS

Six months ended June 30, Year Ended<br> December 31,
2021 2020 2020
Unaudited Audited
Note in thousands, except per share amounts
Research and development expenses 5a $ 493 $ 649
General and administrative expenses 5b 970 1,902
Other expenses - 742
Operating loss 1,463 3,293
Finance income (29 ) (630 )
Finance expenses 1,204 872
Loss from operations 2,638 3,535
Loss 2,638 3,535
Total comprehensive loss 2,638 3,535
Attributable to:
Equity holders of the Company 2,638 3,482
Non-controlling interests - (53 )
2,638 3,535
Basic loss per share attributable to equity holders of the Company:
Loss from operations 0.01 0.10
Diluted loss per share attributable to equity holders of the Company:
Loss from operations 0.01 0.11

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

4

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF CHANGES IN EQUITY (DEFICIT)

For the six months ended June 30, 2021

Attributable to equity holders of the Company
Share<br> capital<br> and<br> premium Reserve<br><br> from<br><br> share-based<br><br> payment<br><br> transactions Warrants Transactions<br><br> with non-<br><br>controlling<br><br> interests Foreign<br><br> currency<br><br> translation<br><br> reserve Accumulated<br><br> deficit Total Non-controlling<br><br> interests Total<br><br> equity
in thousands
Balance at January 1, 2021 4,315 2,207 559 497 (55,188 ) 1,430 - 1,430
Income (loss) - - - - (2,650 ) (2,650 ) - (2,650 )
Issue of share capital, net of issue expenses (*)(Note 4d) - 4,334 - - - 7,699 - 7,699
Exercise of warrants (Note 4c) - (285 ) - - - 1,085 - 1,085
Expiration of share options (27 ) - - - - - - -
Cost of share-based payment 24 - - - - 24 - 24
Balance at June 30, 2021 4,312 6,256 559 497 (57,838 ) 7,588 - 7,588

All values are in US Dollars.

(*) Net<br>of issue expenses of $449 thousand.

The accompanying notes are an integral part of the interim consolidated financial statements.

5

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF CHANGES IN EQUITY

For the six months ended June 30, 2020

Attributable to equity holders of the Company
Share<br> capital<br> and<br> premium Reserve<br><br> from<br><br> share-based<br><br> payment<br><br> transactions Warrants Transactions<br><br> with non-<br><br>controlling<br><br> interests Foreign<br><br> currency<br><br> translation<br><br> reserve Accumulated<br><br> deficit Total Non-controlling<br><br> interests Total<br><br> equity
in thousands
Balance at January 1, 2020 4,862 - 261 497 (51,706 ) 14 - 14
Income (loss) - - - - (2,638 ) (2,638 ) - (2,638 )
Warrants reclassification
Issue of share capital - - - - - 1,462 - 1,462
Non-controlling interests - - 298 - - 298 53 351
Expiration of share options (159 ) - - - - - - -
Cost of share-based payment 169 - - - - 169 - 169
Balance at June 30, 2020 4,872 - 559 497 (54,344 ) (695 ) 53 (642 )

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

6

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF CHANGES IN EQUITY

For the year ended December 31, 2020

Attributable to equity holders of the Company
Share<br> capital<br> and<br> premium Reserve<br><br> from<br><br> share-based<br><br> payment<br><br> transactions Warrants Transactions<br><br> with non-<br><br>controlling<br><br> interests Foreign<br><br> currency<br><br> translation<br><br> reserve Accumulated<br><br> deficit Total Non-controlling<br><br> interests Total<br><br> equity
in thousands
Balance at January 1, 2020 $ 4,862 $ 464 $ 261 $ 497 $ (51,706 ) $ 14 $ - $ 14
Income (loss) - - (3,482 ) (3,482 ) (53 ) (3,535 )
Warrants reclassification (464 ) (464 ) (464 )
Issue of share capital, net of issue expenses (1) - 2,207 - - - 4,970 - 4,970
Conversion of convertible debentures - - - - - 3 - 3
Non-controlling interests - - 298 - - 298 53 351
Expiration of share options (638 ) - - - - - - -
Cost of share-based payment 91 - - - - 91 - 91
Balance at December 31, 2020 4,315 2,207 559 497 (55,188 ) 1,430 - 1,430

All values are in US Dollars.

(1) Net of issue expenses of $784 thousand.

The accompanying notes are an integral part of the interim consolidated financial statements.

7

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

Six months ended June 30, Year Ended<br> December 31,
2021 2020 2020
Unaudited Audited
in thousands
Cash flows from operating activities:
Loss ) $ (2,638 ) $ (3,535 )
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to the profit or loss items:
Depreciation and amortization 33 164
Cost of share-based payment 169 91
Finance expenses, net 710 (476 )
Impairment of investment in associate - 795
912 574
Working capital adjustments:
Decrease (increase) in other accounts receivable ) (557 ) (519 )
Increase (decrease) in trade payables ) 193 (752 )
Decrease in other accounts payable (43 ) (75 )
) (407 ) (1,346 )
Net cash used in operating activities ) $ (2,133 ) $ (4,307 )

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

8

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

Six months ended June 30, Year Ended<br> December 31,
2021 2020 2020
Unaudited Audited
in thousands
Cash flows from investing activities:
Investment in restricted bank deposits ) $ - $ 24
Net cash provided by investing activities ) - 24
Cash flows from financing activities:
Proceeds from issue of share capital and warrants (net of issuance expenses) (Note 4) 1,441 5,026
Payment of issuance expenses related to previous period (b) - 116
Interest paid on lease liability - (7 )
Repayment of lease liability - (26 )
Exercise of warrants (Note 4c) - -
Repayment of short-term credit ) (8 ) (1,410 )
Receipt of short-term credit from others, net (26 ) 1,660
Net cash provided by financing activities 1,407 5,359
Increase (decrease) in cash and cash equivalents (726 ) 1,076
Cash and cash equivalents at the beginning of the period 870 870
Cash and cash equivalents at the end of the period $ 144 $ 1,946

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

9

SCISPARC LTD.

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

Six months ended June 30, Year Ended<br><br> December 31,
2021 2020 2020
Unaudited Audited
in thousands
(a) Significant non-cash transactions:
Investment in associate $ 742 $ -
Exercise of warrants $ 1,419 $ -
Modification of leasing agreement $ 101 $ -

All values are in US Dollars.

The accompanying notes are an integral part of the interim consolidated financial statements.

10

SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:- GENERAL

a. SciSparc Ltd. (“SciSparc” or the “Company”), a pharmaceutical company, was incorporated in Israel and commenced its operations on August 23, 2004. Until March 2014, SciSparc and its subsidiaries at the time (the “Group”) 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 according to which it would focus on developing a portfolio of approved drugs based on cannabinoid molecules. With this focus, the Company is currently engaged in the development programs based on Δ9-tetrahydrocannabinol and/or non-psychoactive cannabidiol for the treatment of Tourette syndrome and for the treatment of obstructive sleep apnea, pain and autism spectrum disorder.
As of June 30, 2021, SciSparc has two subsidiaries, both of which are companies incorporated under<br> the laws of Israel (the “Subsidiaries”): (1) Brain Bright Ltd. (“Brain Bright”); and (2) Evero Health<br> Ltd.
---
Both of the Subsidiaries are private companies, and as of the date of these financial statements,<br> Brain Bright is an inactive company with no assets or liabilities. SciSparc also owns approximately 27% of Lara Pharm Ltd.’s<br> (“Lara”) share capital. Lara is a private company incorporated under the laws of Israel which, to the best knowledge of<br> the Company, does not engage in any business, and in any event, SciSparc does not have significant influence on Lara since it has no<br> representation in Lara’s board of directors. The Company wrote-off the entire investment in Lara in 2015.
---
On October 3, 2018, SciSparc obtained control over Therapix Healthcare Resources Inc.<br> (“THR”), a Delaware corporation, which was established on July 31, 2018, by holding 82.36% of THR’s equity. On<br> June 27, 2019, following the finalization of THR’s dissolution, SciSparc deconsolidated THR.
---
b. These interim consolidated financial statements should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2020, and accompanying notes, that were filed with the SEC on March 30, 2021. (the “2020 Annual Consolidated Financial Statements”).
--- --- 
11

SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:- GENERAL(cont.)

c. All information in the interim consolidated financial statements regarding the ADSs assumes that all of the Company’s Ordinary Shares have been converted into ADSs. As of June 30, 2021, each ADS represented 140 Ordinary Shares (see Note 4a). [See Note 7a, “Subsequent Events After the Reporting Period” for additional information.]
d. The Company incurred a net loss of approximately $2.65 million and had negative cash flows from operating activities of approximately $2.95 million for the six-month period ended June 30, 2021. As of June 30, 2021, the Company had an accumulated deficit of approximately $57.8 million as a result of recurring operating losses. As the Company presently has no activities that generate revenues, the Company’s continued operation is dependent on its ability to raise funding from external sources. This dependency will continue until the Company will be able to finance its operations by selling its products or commercializing its technology. Also, all of the Company’s current research and development operations are in abeyance and require additional funds before they can progress. In addition, the Company’s management believes that the balance of cash held by the Company as of August 15, 2021 (the “Approval Date”), in which the interim consolidated financial statements for the period ended June 30, 2021, were approved, will be sufficient to finance its operating activities in the foreseeable future.
--- ---
e. The interim consolidated financial statements of the Company for the six-month period ended on June 30, 2021 were approved for issue on August 15, 2021. In connection with the preparation of the interim consolidated financial statements and in accordance with authoritative guidance for subsequent events, the Company evaluated subsequent events after the consolidated statements of financial position date of June 30, 2021, through August 15, 2021, the date on which the unaudited interim consolidated financial statements were available to be issued.
--- ---

NOTE 2:- SIGNIFICANTACCOUNTING POLICIES

Basis of preparation of the interim consolidated financial statements:

The interim consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. The significant accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the 2020 Annual Consolidated Financial Statements.

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SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3:- CONVERTIBLELOANS

a. On January 15, 2020, the Company entered into a bridge loan agreement (the “Bridge Loan”) with a third party, in which the third party lent to the Company $50 thousand (the “Bridge Loan Amount”). On April 17, 2020, the Bridge Loan Amount was fully repaid by the Company, including interest in the amount of $2 thousand. Accordingly, the Bridge Loan was terminated with no further effect.
b. On March 19, 2020, the Company entered into a securities purchase agreement with Dekel Pharmaceutical Ltd. (“Dekel”) pursuant to which Dekel agreed to invest in the Company through a private placement transaction (the “Private Placement”). At the time of the Private Placement, Dekel was considered as a related party to the Company; however, it is no longer a related party to the Company. In connection with the Private Placement, Dekel received convertible promissory notes (the “Notes”), with an aggregate original principal amount of approximately $350,000 at an aggregate purchase price of $315,000 to be paid in several tranches spread across a twelve-month period. In addition, the Company issued a warrant to purchase up to 4,490 ADSs of the Company (the “Private Placement Warrant”) and 571 ADSs. The initial tranche of the Private Placement was for a principal amount of $220,000 at a purchase price of $198,000. The Notes are unsecured, have a maturity date of March 23, 2021, bear interest at a rate of 12% per annum, and may be converted, at the election of the holder, into ADSs at an initial conversion price of $24.50 per ADS (the “Fixed Conversion Price”), subject to adjustments. After the six-month anniversary of the issuance of the Notes, the conversion price shall be equal to the lower of the Fixed Conversion Price or 70% of the lowest trading price of the ADSs as reported on Nasdaq or any exchange upon which the ADSs or ordinary shares of the Company are traded at such time, for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The Private Placement Warrant is exercisable at any time on or after the actual closing date and on or prior to the close of business on the five-year anniversary of the date of issuance, at an initial exercise price of $24.50 per ADS, subject to adjustment. On November 8, 2020, the Notes were terminated and the initial tranche was fully repaid by the Company.
--- ---

General Overview of Valuation Approachesused in the Valuation:

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.

Economic methodology:

The Private Placement Warrant’s’ fair value was calculated using the Black–Scholes option pricing model, which takes into account the parameters as disclosed below for each period valuated, in which a valuation was performed at (i) the issuance date, and (ii) each reporting date with the following assumptions:

December 31,<br> 2020
Dividend yield (%) 0 0
Expected volatility (%) 136 132
Risk-free interest rate (%) 0.87 0.38
Underlying Share Price () 7.98 3.625
Exercise price () 24.5 24.5
Warrants fair value () 5.51 2.22

All values are in US Dollars.

13

SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4: EQUITY

a. Composition of share capital as of June 30, 2021, June 30, 2020 and December 31, 2020:
June 30, 2021 December 31, 2020 June 30, 2020
--- --- --- --- --- --- --- --- --- --- --- --- ---
Authorized Issued andoutstanding Authorized Issued andoutstanding Authorized Issued andoutstanding
Number of shares
Ordinary Shares of no par value each 3,600,000,000 317,686,651 1,800,000,000 145,148,593 1,000,000,000 563,521,454

Description of ADSs:

The Bank of New York Mellon, as depositary, registers and delivers the Company’s ADSs. Each ADS represents one hundred and forty (140) Ordinary Shares.. Each ADS also represents any other securities, cash or other property which may be held by the depositary.

Reverse Share Split

On September 17, 2020, the Company convened a special general meeting of its shareholders, whereby the shareholders approved, inter alia, (i) an increase to the Company’s share capital from 500,000,000 Ordinary Shares to 750,000,000 Ordinary Shares; and (ii) a reverse split of the Company’s share capital up to a ratio of 20:1 (the “Reverse Split”).

On October 16, 2020, the Company convened a special general meeting of its shareholders, whereby the shareholders approved an increase to the Company’s share capital from 750,000,000 Ordinary Shares to 1,800,000,000 Ordinary Shares.

On October 1, 2020, the Company’s Board resolved that the final ratio for the Reverse Split will be 20:1, which went effective on October 16, 2020. Concurrently with the Reverse Split, a change to the ratio of its ADSs to its ordinary shares was effective pursuant to which each ADS representing 40 Ordinary Shares changed to each ADS representing 140 Ordinary Shares.

On March 2, 2021, the Company convened a special general meeting of its shareholders, whereby the shareholders approved to eliminate the par value of the Ordinary Shares and an increase to the Company’s share capital from 1,800,000,000 Ordinary Shares to 3,600,000,000 ordinary shares.

On July 19, 2021, the Company’s Board resolved that the final ratio for the Reverse Split will be 140:1, which went effective on August 9, 2021. Concurrently with the Reverse Split, a change to the ratio of its ADSs to its Ordinary Shares was effective pursuant to which each ADS representing 140 ordinary shares changed to each ADS representing 1 Ordinary Share. Since the ADS to ordinary shares ratio is being reduced on the same proportionate basis as the reverse split, no overall effect on the ADS share price is expected. The number of ADSs held by each holder is not expected to change, and no action is required by ADS holders.

Issued and outstanding share capital:

Number of <br> ordinary<br><br> shares
Balance at January 1, 2021 145,148,593
Cancellation of shares (182 )
Issuance of share capital – March 2021 Financing Round (Note 4d) 128,284,240
Exercise of November 2020 Warrants (Note 4c) 30,254,000
Exercise of Pre-funded warrants (Note 4d) 14,000,000
Balance at June 30, 2021 317,686,651 
14

SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4: EQUITY(cont.)

b. On April 1, 2020 the Company entered into a definitive securities purchase agreement (the “April 2020 Purchase Agreement”) with institutional investors to purchase 4,166,668 units, each consisting of (i) one pre-funded warrant to purchase one ADS and (ii) one Series B warrant to purchase one ADS, at a purchase price of $0.2999 per unit. The Series B warrants have an exercise price of $0.43 per ADS, are exercisable upon issuance and expire five years from the date of issuance. The offering resulted in gross proceeds to the Company of approximately $1.25 million. The closing of the sale of the securities took place on April 3, 2020. After the closing of the April 2020 Purchase Agreement and until the Approval Date, all pre-funded warrants were exercised. In addition, 4,161,668 of the Series B warrants were exercised pursuant to a cashless exercise mechanism as described in the April 2020 Purchase Agreement for no further consideration to the Company. As of the Approval Date, there were 5,000 Series B warrants unexercised.

The Series B warrants are classified as a financial liability that will be measured at fair value, through profit or loss, as of the issuance date and on any following financial reporting date (accordingly, issue expenses related to the Series B warrants will be recorded through profit or loss). No consideration will be left to attribute to the pre-funded warrants, which is an equity instrument.

The valuation of the conversion component of the Series B warrants was set at fair value, as required in IFRS 9, and in accordance with IFRS 13, and was categorized as Level 3 by the Company.

c. On November 20, 2020, the Company completed an offering for gross proceeds of $4,200,000 by way of the<br>issuance of an aggregate of 835,447 units, each consisting of (i) one ADS and (ii) two warrants to purchase one ADS each, at a purchase<br>price of $5.02 per unit (“November 2020 Warrants”). The November 2020 Warrants have an exercise price of $5.02 per<br>ADS, will be exercisable upon issuance and will expire five years from the date of issuance.

The November 2020 Warrants are classified as issued warrants in the Company’s equity.

During February 2021 through to June 2021, the Company received proceeds of $1,085,000 in respect of the exercise of 216,100 of the November 2020 Warrants and issued 30,254,000 shares.

15

SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4: EQUITY(cont.)

d. On March 4, 2021, the Company completed a private offering with several accredited and institutional investors<br>for gross proceeds of $8,150,000, providing for the issuance of an aggregate of 1,152,628 units, as follows: (a) 916,316 units at a price<br>of $7.07 per unit, consisting of (i) one ADS of the Company, and (ii) a Series A Warrant to purchase an equal number of units purchased<br>(the “2021 Series A Warrant”) and a Series B Warrant (the “2021 Series B Warrant”) to purchase half the number<br>of units, and (b) 236,312 pre-funded units at a price of $7.069 per unit, consisting of (i) one pre-funded warrant to purchase one ADS<br>and (ii) one 2021 Series A Warrant and one 2021 Series B Warrant.

The Series A Warrant have an exercise price of $7.07 per ADS and the Series B Warrants have an exercise price of $10.60 per ADS “March 2021 Warrants”). Both were exercisable upon issuance and will expire five years from the date of issuance.

The March 2021 Warrants are classified as issued warrants in the Company’s equity.

During June 2021, the Company issued 14,000,000 shares in respect of the exercise of 100,000 of the pre-funded warrant.

NOTE 5:- ADDITIONALINFORMATION TO THE ITEMS OF PROFIT OR LOSS

Six months ended June 30, Year Ended<br> December 31,
2021 2020 2020
Unaudited Audited
in thousands
a. Research and development expenses:
Wages and related expenses $ 181 $ 322
Share-based payment 100 69
Clinical studies 1 -
Regulatory, professional and other expenses 178 119
Research and preclinical studies 33 139
Chemistry and formulations - -
493 649
b. General and administrative expenses:
Wages and related expenses 106 237
Share-based payment 69 22
Professional and directors’ fees 679 1,283
Business development expenses 5 58
Office maintenance, rent and other expenses 53 182
Investor relations and business expenses 7 22
Regulatory expenses 51 98
$ 970 1,902

All values are in US Dollars.

16

SCISPARC LTD.

NOTES TOINTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6:- SIGNIFICANTEVENTS DURING THE REPORTING PERIOD

a. Public health epidemics or outbreaks could adversely impact the Company’s business. In late 2019, a novel strain of COVID-19, also known as coronavirus, was reported in Wuhan, China. While initially the outbreak was largely concentrated in China, it has now spread to several other countries, including in Israel, and infections have been reported globally. The extent to which the coronavirus impacts the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. In particular, the continued spread of the coronavirus globally, could adversely impact the Company’s operations and workforce, including other Company’s research and clinical trials and its ability to raise capital, which in turn could have an adverse impact on the Company’s business, financial condition and results of operation

The Company will continue to monitor the situation, in which as described above, the Company expects the COVID-19 pandemic to continue having an impact on the Company’s operations and the entire world during the following months.

b. On January 7, 2021, the general meeting of the Company’s shareholders approved the election of Mr. Amnon Ben Shay and Mr. Alon Dayan to serve as external directors of the Company, for a three-year term commencing as of the date of such meeting.

17

Exhibit 99.2

MANAGEMENT’SDISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussionand analysis of our financial condition and results of operations provides information that we believe to be relevant to an assessmentand understanding of our results of operations and financial condition for the periods described. This discussion should be read in conjunctionwith our interim consolidated financial statements and the notes to such financial statements, which are included in this Report on Form6-K. In addition, this information should also be read in conjunction with the information contained in our Annual Report on Form 20-Ffor the year ended December 31, 2020, or the Annual Report, including the consolidated annual financial statements as of December 31,2020 and their accompanying notes included therein, filed with the Securities and Exchange Commission, or the SEC, on March 30, 2021.

Unless otherwise indicated,all references to the terms “we”, “us”, “our”, “SciSparc”, “the Company” and“our Company” refer to SciSparc Ltd. and its wholly-owned subsidiaries. References to “Ordinary Shares,” “ADSs”and “warrants” refer to the ordinary shares, American Depositary Shares and warrants, respectively, of SciSparc.

We report financial informationunder International Financial Reporting Standards, as issued by the International AccountingStandards Board and none of the financial statements were prepared in accordance with generally accepted accounting principles in theUnited States.

Referencesto “U.S. dollars,” “USD” and “$” are to currency of the United States of America, and references to“NIS” are to New Israeli Shekels. Unless otherwise indicated, U.S. dollar translations of NIS amounts presentedherein are translated using the rate of NIS 3.26 to $1.00, the exchange rate reported by the Bank of Israel on June 30, 2021.

Forward-Looking Statements

The following discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements are often characterized by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue,” “believe,” “should,” “intend,” “project” or other similar words, but are not the only way these statements are identified. These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

● our ability to raise capital through the issuance of additional securities;
● our ability to advance the development our product candidates, including the anticipated starting and<br>ending dates of our anticipated clinical trials;
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● our assessment of the potential of our product candidates to treat certain indications;
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● our ability to successfully receive approvals from the U.S. Food and Drug Administration, or other regulatory<br>bodies, including approval to conduct clinical trials, the scope of those trials and the prospects for regulatory approval of, or other<br>regulatory action with respect to our product candidates, including the regulatory pathway to be designated to our product candidates;
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● the regulatory environment and changes in the health policies and regimes in the countries in which we<br>operate, including the impact of any changes in regulation and legislation that could affect the pharmaceutical industry;
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● our ability to commercialize our existing product candidates and future sales of our existing product<br>candidates or any other future potential product candidates;
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● our ability to meet our expectations regarding the commercial supply of our product candidates;
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● the overall global economic environment;
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● the impact of COVID-19 and resulting government actions on us;
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● the impact of competition and new technologies;
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● general market, political and economic conditions in the countries in which we operate;
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● projected capital expenditures and liquidity;
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● the impact of competition and new technologies;
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● changes in our strategy;
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● litigation;
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● our ability to list our Ordinary Shares on Nasdaq and our ongoing ability to remain eligible to list our<br>Ordinary Shares on Nasdaq; and
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● those factors referred to in “Item 3. Key Information – D. Risk Factors,” “Item 4. Information on the Company,”<br>and “Item 5. Operating and Financial Review and Prospects,” of the Annual Report as well other factors in the Annual Report.
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These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in the Annual Report. You should not rely upon forward-looking statements as predictions of future events.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Report on Form 6-K.

Overview

We are a specialty clinical-stage pharmaceutical company. Our focus is creating and enhancing a portfolio of technologies and assets based on cannabinoid therapies. With this focus, we are currently engaged in the development of the following pharmaceutical compositions comprising N-acylethanolamines and cannabinoids, such as Palmitoylethanolamide (PEA) and/or Δ9-tetrahydrocannabinol (THC) and/or non-psychoactive cannabidiol (CBD) and/or other cannabinoid receptor agonists: SCI-110 for the treatment of Tourette syndrome, or TS, obstructive sleep apnea, or OSA, and Alzheimer’s disease and agitation; SCI-160 for the treatment of pain; and SCI-210 for the treatment of Autism Spectrum Disorder, or ASD, and epilepsy.

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SCI-110 is a combination therapy candidate based on two components: (1) THC, which is the major cannabinoid molecule in the cannabis plant, and (2) CannAmide™, a proprietary PEA formulation. PEA is an endogenous fatty acid amide that belongs to the class of nuclear factor agonists, which are molecules that regulate the expression of genes. We believe that the combination of THC and PEA may induce a reaction known as the “entourage effect,” which has strong potential to treat TS, OSA and Alzheimer’s disease and agitation..

SCI-160 is a novel pharmaceutical preparation containing a CB2 receptor agonist for the treatment of pain. This innovative CB2 receptor agonist was synthesized by Raphael Mechoulam, Ph.D., Professor of Medicinal Chemistry at the Hebrew University, a member of the SciSparc Scientific Advisory Board.

Pursuant to the positive results obtained in the phase IIa TS study conducted at Yale School of Medicine, we are developing a regulatory dossier to be submitted to the German Federal Institute for Drugs and Medical Devices and the Israeli Ministry Of Health for our SCI-110 program for TS. In addition, we announced in November 2019 positive topline results from our Phase IIa clinical study in OSA, suggesting that SCI-110 positively affects symptoms in adult subjects with OSA. Following the recent successful completion of the Phase IIa OSA clinical study the Company is now assessing business and clinical strategies for further development of this program. In February 2021, we announced an agreement with The Israeli Medical Center for Alzheimer’s, to conduct a phase IIa clinical trial to evaluate the potential safety, tolerability and efficacy of SCI-110 in patients with Alzheimer’s disease and agitation using our proprietary cannabinoid-based technology. Sporadic observation in healthy or sick individuals indicated that cannabis products and in particular THC have calming and anti-anxiety effects. Based on our pre-clinical and clinical experience using SCI-110 we believe that this treatment may potentially be found to be more safe and efficacious than THC alone. Similarly, following positive results in a pre-clinical study that consisted of in vitro tests which showed synergy between CBD and PEA, we announced in December 2019 progression of SCI-210 into a clinical stage, and our plans to initiate a randomized, double blind placebo controlled study to evaluate the potential efficacy, safety and tolerability of SCI-210 in treating patients with ASD. In addition, in March 2021, we announced an agreement with The Sheba Fund for Health Services and Research at Chaim Sheba Medical Center, to examine the potential role of SCI-210 on status epilepticus.

On August 2, 2021, we announced positive topline results for our proprietary SCI 160 in pre-clinical study. The study, “An evaluation of SCI-160 on neuropathic pain in the rat spared nerve injury (SNI) model and post-surgical pain in the rat hind paw incision model,” was designed to help assess the potential of SCI-160. Collectively, the results indicate that treatment with SCI-160 significantly alleviates both chronic and acute pain.

Operating Results

To date, we have not generated revenue from the sale of any product, and we do not expect to generate significant revenue within the next year at least. As of June 30, 2021, we had an accumulated deficit of approximately $57.8 million. Our financing activities are described below under “Liquidity and Capital Resources – Financing Activities.”

Operating Expenses

Our current operating expenses consist of two components – research and development expenses, and general and administrative expenses.

Research and Development Expenses

Our research and development expenses consist primarily of salaries and related personnel expenses, share-based compensation expenses, consulting and subcontractor expenses and other related research and development expenses.

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The following table discloses the breakdown of research and development expenses:

Six-month period ended June 30,
2021 2020
(unaudited) (unaudited)
(in thousands of )
Wages and related expenses 181
Share-based payments 100
Clinical studies 1
Research & preclinical studies 33
Chemistry & formulations -
Regulatory and other expenses 178
493

All values are in US Dollars.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, share-based compensation expense, professional service fees for accounting, legal, bookkeeping, facilities and other general and administrative expenses.

The following table discloses the breakdown of general and administrative expenses:

Six-month period ended June 30,
2021 2020
(unaudited) (unaudited)
(in thousands of )
Wages and related expenses 106
Share-based payment 69
Professional and directors fees 679
Investor relations and business expenses 7
Office maintenance, rent and other expenses 53
Regulatory expenses 51
Business development 5
Total 970

All values are in US Dollars.

Comparison of the six-months ended June 30,2021 to the six-months ended June 30, 2020

Research and Development Expenses, net

Our research and development expenses for the six months ended June 30, 2021 amounted to $962,000, representing an increase of $469,000, or 95%, compared to $493,000 for the six months ended June 30, 2020. The increase was primarily attributable to an increase of $249,000 in chemistry and formulations expenses, an increase of $144,000 in regulatory, professional and other expenses, an increase of $109,000 in research and pre-clinical studies, and an increase of $48,000 in clinical studies, offset by a decrease of $83,000 in share-based payments.

General and Administrative Expenses

Our general and administrative expenses totaled $1.7 million for the six months ended June 30, 2021, an increase of $0.7 million, or 72%, compared to $0.97 million for the six months ended June 30, 2020. The increase resulted primarily from an increase of $0.55 million in investor relations and business expenses and an increase of $0.2 million in professional and director fees, offset by a decrease of $0.06 million in share-based payments.

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Operating Loss

As a result of the foregoing, our operating loss for the six months ended June 30, 2021 was $2.63 million, compared to an operating loss of $1.46 million for the six months ended June 30, 2020, an increase of $1.17 million, or 80%.

Finance Expense and Income

Financial expense and income consist of revaluation of debt instruments presented at fair value, related issuance expenses of debt instruments and bank fees.

We recognized no financial income for the six months ended June 30, 2020, representing a decrease of $29,000 compared to financial income of $29,000 for the six months ended June 30, 2019.

We recognized financial expense for the six months ended June 30, 2021 of $23,000, representing a decrease of $1,181,000 compared to financial expenses of $1,204,000 for the six months ended June 30, 2020. The decrease was primarily due to a change in the fair value of debt instruments and other transactional costs.

Total Comprehensive Loss

Our total comprehensive loss for the six months ended June 30, 2021 was $2.65 million, representing an increase of $102,000, or 0.4%, compared to $2.64 million for the six months ended June 30, 2020.

Liquidity and Capital Resources

Overview

As of June 30, 2021, we had $7,601,000 in cash, including short term restricted deposits.

The table below presents our cash flows:

Six months ended <br>June 30,
2021 2020
(unaudited) (unaudited)
(in thousands of )
Net cash used in operating activities ) (2,133 )
Net cash provided by (used in) investing activities ) -
Net cash provided by (used in) financing activities 1,407

All values are in US Dollars.

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Operating Activities

Net cash used in operating activities was $2.95 million for the six months ended June 30, 2021, compared with net cash used in operating activities of $2.13 million for the six months ended June 30, 2020. The decrease is primarily due to decreases in adjustments to the profit or loss items of finance expenses of $0.7 million and share-based payment of $0.14 million.

Investing Activities

Net cash used in investing activities was $1 for the six months ended June 30, 2021, compared with no net cash used by investing activities for the six months ended June 30, 2020.

Financing Activities

Net cash provided by financing activities of $8.6 million in the six months ended June 30, 2021, consisted mainly of $7.7 million of net proceeds from the issuance of share capital and warrants, and $1.08 million of proceeds from the exercise of warrants. Net cash used in financing activities in the six months ended June 30, 2020, consisted of $1.4 million of net proceeds from the issuance of share capital and warrants.

On March 4, 2021, we completed a private offering with several accredited and institutional investors for gross proceeds of approximately $8,150,000, providing for the issuance of an aggregate of 1,152,628 units, as follows: (a) 916,316 units at a price of $7.07 per unit, consisting of (i) one ADS of the Company, and (ii) a Series A Warrant to purchase an equal number of units purchased (the “2021 Series A Warrant”) and a Series B Warrant (the “2021 Series B Warrant”) to purchase half the number of units, and (b) 236,312 pre-funded units at a price of $7.069 per unit, consisting of (i) one pre-funded warrant to purchase one ADS and (ii) one 2021 Series A Warrant and one 2021 Series B Warrant.

The Series A Warrant have an exercise price of $7.07 per ADS and the Series B Warrants have an exercise price of $10.60 per ADS. Both were exercisable upon issuance and will expire five years from the date of issuance.

The offering resulted in gross proceeds to the Company of approximately $8,150,000.

During February 2021 through to June 2021, the Company received proceeds of $1,085,000 in respect of the exercise of 216,100 of the November 2020 Warrants and issued 30,254,000 shares.

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Current Outlook

We have financed our operations to date primarily through proceeds from sales of our Ordinary Shares and ADSs as well as exercises of warrants and options to purchase Ordinary Shares or ADSs, as the case may be. We have incurred losses and generated negative cash flows from operations since August 2004. Since August 2004, we have not generated any revenue from the sale of product candidates and we do not expect to generate revenues from sale of our product candidates in the next few years.

As of June 30, 2021, our cash was $7,590,000.

We believe that our existing cash resources will be sufficient to finance our operating activities in the foreseeable future; however, we expect that we will require substantial additional capital to complete the development of, and to commercialize, our product candidates. If we do seek to raise additional capital, there can be no guarantee or assurance that we will be successful in raising such additional capital or that the term of such capital raise will be on terms favorable to us. In addition, as we continue to assess the effects of the COVID-19 pandemic and its impact on capital market transactions in the United States, although we were able to raise financing in April 2020, November 2020 and March 2021 offerings, all of which were during the COVID-19 pandemic, there can be no assurance that we will be able to raise financing again during the COVID-19 pandemic, or even after COVID-19 is no longer a “pandemic” if, for example, there is downturn in the U.S. or global economy.

In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional financing sooner than planned. Following actions taken during fiscal year 2020 to reduce our operating expenses in the short term as a result of the COVID-19 pandemic, we are currently looking to expand our operations including planned clinical trials and early commercialization efforts for our proprietary PEA oral tablets CannAmide™. There can be no assurance that the analysis that we have undertaken or remedial measures that have been enacted will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally or in our sector in particular. In addition, our efforts to commercialize our proprietary PEA oral tablets CannAmide™ may not lead to any revenue or revenue at the level at which we are expecting. In addition to the COVID-19 pandemic, our future capital requirements will depend on many factors, including:

● the progress and costs of our research and development activities;
● the costs of manufacturing our product candidates;
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● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;
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● the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities<br>internally; and
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● the magnitude of our general and administrative expenses.
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Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through debt and/or equity financings (such as our March 2017, March 2019, December 2019, April 2020, November 2020 and March 2021 offerings of ADSs and/or warrants). We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our product candidates.

Critical Accounting Policies

The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, obligations and expenses during the reporting periods. A comprehensive discussion of our critical accounting policies is included in “Item 5. Operating and Financial Review and Prospects - Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report.

Off-Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements.

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