SciSparc, AutoMax Motors Mutually Terminate Merger Agreement
New framework agreement focuses on a loan repayment plan, allowing the pharmaceutical firm to refocus on its core CNS pipeline.
SciSparc Ltd. (SPRC), a clinical-stage pharmaceutical company, and vehicle importer AutoMax Motors Ltd. have mutually agreed to terminate their planned merger. The decision, , nullifies the original merger agreement signed in April 2024 and signals a strategic shift for both companies.
Instead of combining operations, the two firms have entered into a new framework agreement that primarily addresses the repayment of outstanding loans SciSparc had extended to AutoMax. This move allows SciSparc to unwind the planned diversification and of developing therapies for central nervous system disorders.
Under the terms of the new agreement, AutoMax will repay a total of $6.25 million in principal, plus accrued interest, to SciSparc. The repayment is structured in two parts: a $2.0 million loan will be paid in monthly installments of $60,000 beginning in November 2025, while a larger $4.25 million loan will be repaid in a single lump sum due on January 1, 2028. of 8% and 9%, respectively.
The termination unwinds what would have been a significant strategic pivot for SciSparc, taking the pharma developer into the parallel vehicle import market, where AutoMax is a prominent player in Israel. The original merger's cancellation suggests a re-evaluation of that strategy in favor of concentrating on its pharmaceutical assets.
For investors, the termination provides clarity on SciSparc's future direction. The company will no longer be pursuing a complex merger outside its area of expertise and has established a clear timeline for the recovery of its capital from AutoMax. This allows management to dedicate its full attention to its clinical-stage drug pipeline and development programs.