Filed Pursuant to Rule 424(b)(5)
Registration No. 333-269839
PROSPECTUS SUPPLEMENT
(to Prospectus dated February 23, 2023)
Up to $1,729,964 of Ordinary Shares
SCISPARC LTD.
We have entered into an At-The-Market Issuance
Sales Agreement which we refer to herein as the ATM Agreement, with Aegis Capital Corp., or Aegis, as the Agent, relating to the sale
of our ordinary shares offered by this prospectus supplement and the accompanying prospectus. In accordance with the terms of the ATM
Agreement, under this prospectus supplement and the accompanying prospectus, we may offer and sell our ordinary shares, no par value per
share, having an aggregate offering price of up to $1,729,964 from time to time through the Agent.
Our ordinary shares are quoted on The Nasdaq Capital
Market, or Nasdaq, under the symbol “SPRC.” On May 8, 2023, the last reported sale price for our ordinary shares was $0.63
per share. The aggregate market value of our outstanding ordinary shares held by non-affiliates as of the date of this prospectus supplement
was approximately $5,189,895, based on 7,220,387 ordinary shares outstanding, 7,208,187 of which were held by non-affiliates, and a per
share price of $0.72 based on the closing sale price of our ordinary shares on May 2, 2023. During the twelve calendar months prior to
and including the date hereof, we did not sell any securities pursuant to General Instruction I.B.5. of Form F-3.
Sales of our ordinary shares if any, under this
prospectus supplement and the accompanying prospectus may be made by any method permitted that is deemed to be an “at the market
offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act.
The Agent is not required to sell any specific
number or dollar amount of securities, but will act as our sales agent using commercially reasonable efforts consistent with its normal
trading and sales practices, on mutually agreed terms between the Agent and us. There is no arrangement for funds to be received in any
escrow, trust or similar arrangement.
The compensation to the Agent for sales of ordinary
shares sold pursuant to the ATM Agreement will be an amount equal to 5.0% of the aggregate gross proceeds of ordinary shares sold under
the ATM Agreement. In connection with the sale of the ordinary shares on our behalf, the Agent will be deemed to be an “underwriter”
within the meaning of the Securities Act and the compensation of the Agent will be deemed to be underwriting commissions or discounts.
We have also agreed to provide indemnification and contribution to the Agent with respect to certain civil liabilities, including liabilities
under the Securities Act.
Investing in our securities involves a high
degree of risk. Before buying any of our securities, you should carefully consider the risk factors described in “Risk Factors”
on page S-3 of this prospectus supplement, and under similar headings in other documents incorporated by reference into this prospectus
supplement and the accompanying prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Aegis Capital Corp.
The date of this prospectus supplement is May 16, 2023
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
We are offering to sell,
and are seeking offers to buy, the securities only in jurisdictions where such offers and sales are permitted. The distribution of this
prospectus supplement and the accompanying prospectus and the offering of the securities in certain jurisdictions may be restricted by
law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must inform
themselves about and observe any restrictions relating to the offering of the securities and the distribution of this prospectus supplement
and the accompanying prospectus outside the United States. This prospectus supplement and the accompanying prospectus do not constitute,
and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus
supplement and the accompanying prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer
or solicitation.
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement
and the accompanying prospectus are part of a “shelf” registration statement on Form F-3 that we filed with the Securities
and Exchange Commission, or the SEC, on February 17, 2023, and which was declared effective by the SEC on February 23, 2023.
This document is in two parts.
The first part is this prospectus supplement, which describes the terms of this offering and also adds to and updates information contained
in the accompanying prospectus and the documents incorporated by reference into this prospectus and the accompanying prospectus. The second
part is the accompanying prospectus, which gives more general information about our ordinary shares and other securities we may offer
from time to time under our shelf registration statement, some of which does not apply to the securities offered by this prospectus supplement.
To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information
contained in the accompanying prospectus or any document incorporated by reference therein, on the other hand, you should rely on the
information in this prospectus supplement.
You should read this prospectus
supplement, the accompanying prospectus, the documents incorporated by reference in this prospectus supplement and the accompanying prospectus
before making an investment decision. You should also read and consider the information in the documents referred to in the sections of
this prospectus supplement entitled “Where You Can Find More Information” and “Incorporation of Certain Information
by Reference.”
Unless otherwise expressly
indicated or the context otherwise requires, we use the terms “SciSparc,” the “Company,” “we,” “us,”
“our” or similar references to refer to SciSparc Ltd.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement,
the accompanying prospectus and the documents incorporated by reference herein contain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private
Securities Litigation Reform Act of 1995. Also, documents that we incorporate by reference into this prospectus supplement, including
documents that we subsequently file with the SEC, contain and will contain forward-looking statements. Forward-looking statements are
those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify
forward-looking statements as statements containing the words “may,” “will,” “could,” “should,”
“expect,” “anticipate” “objective,” “goal,” “intend,” “estimate,”
“believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those
expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements include all statements
contained or incorporated by reference in this prospectus supplement and the accompanying prospectus supplement regarding 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.
You should not place undue
reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions,
including in many cases decisions or actions by third parties, that are difficult to predict. Our forward-looking statements are based
on the information currently available to us and speak only as of the date on the cover of this prospectus supplement or the accompanying
prospectus, as the case may be, or, in the case of forward-looking statements incorporated by reference, the date of the filing that includes
the statement. Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking
statements, and such difference might be significant and materially adverse to our security holders. We undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required
by applicable law.
We have identified some of
the important factors that could cause future events to differ from our current expectations and they are described in this prospectus
and supplements to this prospectus (if any) under the caption “Risk Factors,” “Use of Proceeds,” and elsewhere
in this prospectus supplement, as well as in our most recent Annual Report on Form 20-F, including without limitation under the captions
“Risk Factors” and “Operating and Financial Review and Prospects,” and in other documents that we may file with
the SEC, all of which you should review carefully. Please consider our forward-looking statements in light of those risks as you read
this prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein.
PROSPECTUS SUPPLEMENT SUMMARY
This summary contains basic
information about us and this offering. Because it is a summary, it does not contain all of the information that you should consider before
investing. Before you decide to invest in our ordinary shares, you should read this entire prospectus supplement and the accompanying
prospectus carefully, including the section entitled “Risk Factors,” and our consolidated financial statements and the related
notes and other documents incorporated by reference in the accompanying prospectus.
Company 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 following pharmaceutical compositions comprising N-acylethanolamines
and cannabinoids, such as Palmitoylethanolamide and/or Δ9-tetrahydrocannabinol and/or non-psychoactive cannabidiol and/or other
cannabinoid receptor agonists: SCI-110 for the treatment of Tourette syndrome and Alzheimer’s disease and agitation; SCI-160
for the treatment of pain; and SCI-210 for the treatment of Autism Spectrum Disorder and Status Epilepticus. We also currently
hold a 50.86% interest in our subsidiary, SciSparc Nutraceuticals Inc., whose business focuses on the sale of hemp-based products on the
Amazon.com marketplace. See “Incorporation of Certain Information by Reference” on page S-12 for more information.
Our Corporate Information
Our
legal and commercial name is SciSparc Ltd. We were incorporated in the State of Israel on August 23, 2004, and are subject to the Companies
Law.
Our
ordinary shares are listed on Nasdaq under the symbol “SPRC”. Our principal executive offices are located at 20 Raul Wallenberg
St., Tower A, 2nd Floor, Tel Aviv 6971916 Israel. Our telephone number in Israel is: (+972) (3) 717 5777. Our website address is http://www.scisparc.com.
The information contained on our website or available through our website is not incorporated by reference into and should not be considered
a part of this prospectus supplement or the accompanying prospectus.
The Offering
| Ordinary Shares currently outstanding |
|
7,220,387 ordinary shares |
| |
|
|
| Ordinary Shares offered by us |
|
Ordinary shares having an aggregate offering price of up to $1,729,964. |
| |
|
|
| Manner of Offering |
|
“At the market offering” that may be made from time to
time through our Agent, Aegis Capital Corp. See “Plan of Distribution” on page S-10 of this prospectus supplement.
|
| |
|
|
| Use of Proceeds |
|
We intend to use the proceeds from this offering for working capital, which includes research and development, to advance our technology and general corporate purposes and pursuing strategic opportunities including expanding our pipeline and investments in other companies which may not be aligned with our current business strategy. At this time, we have not identified any potential investments, and we can provide no assurance that we will be able to complete any potential investments that we are able to identify. See “Use of Proceeds” on page S-7 of this prospectus supplement. |
| |
|
|
| Risk Factors |
|
You should read the “Risk Factors” section starting on page S-3 of this prospectus
supplement and in the accompanying prospectus and the documents we have filed with the SEC that are incorporated by reference herein
for more information, before you make any investment in our ordinary shares. |
| |
|
|
| Nasdaq symbol |
|
“SPRC.” |
The
number of ordinary shares to be outstanding immediately after this offering as shown is based on 7,220,387 ordinary shares outstanding
as of May 8, 2023. This number excludes:
| |
● |
183,284 ordinary shares issuable upon the exercise of options outstanding under our 2015 Share Option Plan, at a weighted average exercise price of $6.38 per Ordinary Share; |
| |
|
|
| |
● |
173,869 ordinary shares reserved for issuance and available for future grant under our 2015 Share Option Plan; |
| |
|
|
| |
● |
9,482,032 ordinary shares issuable upon the exercise
of outstanding warrants, with exercise prices ranging from $2.63 to $24.50 per ordinary share; and
|
| |
|
|
| |
● |
18,156 ordinary shares issuable upon the exercise of outstanding pre-funded warrants, with an exercise price of $0.001 per ordinary share. |
RISK FACTORS
Investing in our securities
involves risks. You should consider carefully the risk factors described in our periodic reports filed with the SEC, including those set
forth under the caption “Item 3. Key Information – D. Risk Factors” in our most recent Annual Report on Form 20-F for
the year ended December 31, 2022, or the 2022 Annual Report, or any updates in our Reports of Foreign Private Issuer on Form 6-K, which
are incorporated by reference in this prospectus supplement, together with all of the other information appearing in this prospectus supplement
and the accompanying prospectus or incorporated by reference into this prospectus supplement or the accompanying prospectus, in light
of your particular investment objectives and financial circumstances. Additional risks and uncertainties not currently known to us or
that we currently deem to be immaterial may also impair our business operations. Our business, financial condition, operating results
or cash flows could be materially adversely affected as a result of these risks. This could cause the trading price of our securities
to decline, and you may lose all or part of your investment. The discussion of risks includes or refers to forward-looking statements;
you should read the explanation of the qualifications and limitations on such forward-looking statements discussed elsewhere in this prospectus
supplement.
Risks Relating to our Ordinary Shares and this
Offering
You will experience immediate dilution in
the book value per share of the ordinary shares you purchase in this offering.
Because the price per share
of our ordinary shares being offered is substantially higher than the net tangible book value per share of our ordinary shares, you will
suffer substantial dilution in the net tangible book value of the ordinary shares you purchase in this offering. Based on the assumed
public offering price of $0.63 per share (the closing sale price of our ordinary shares on May 8, 2023) and assuming that we sell all
$1,729,964 of ordinary shares under this prospectus supplement, and after deducting commissions and estimated aggregate offering expenses
payable by us, if you purchase ordinary shares in this offering, you will experience immediate and substantial dilution of $0.29 per share
in the net tangible book value of the ordinary shares. See the section titled “Dilution” below for a more detailed discussion
of the dilution you will incur if you purchase ordinary shares in this offering.
Our management will have broad discretion
over the use of the net proceeds from this offering.
We currently intend to use
the net proceeds from the sale of our ordinary shares under the ATM Agreement for general corporate purposes, including working capital.
We have not reserved or allocated specific amounts for any of these purposes and we cannot specify with certainty how we will use the
net proceeds (see “Use of Proceeds”). Accordingly, our management will have considerable discretion in the application of
the net proceeds and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being
used appropriately. We may use the net proceeds for corporate purposes that do not increase our operating results or market value.
It is not possible to predict the aggregate
proceeds resulting from sales made under the ATM Agreement.
Subject to certain limitations
in the ATM Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the Agent at any time
throughout the term of the ATM Agreement. The number of shares that are sold through the Agent after delivering a placement notice will
fluctuate based on a number of factors, including the market price of our ordinary shares during the sales period, the limits we set with
the Agent in any applicable placement notice, and the demand for our ordinary shares during the sales period. Because the price per share
of each share sold will fluctuate during the sales period, it is not currently possible to predict the aggregate proceeds we will raise
in connection with those sales.
The ordinary shares offered hereby will
be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different
prices.
Investors who purchase shares
in this offering at different times will likely pay different prices, and so may experience different levels of dilution and different
outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and number of shares
sold in this offering. In addition, subject to the final determination by our board of directors, there is no minimum or maximum sales
price for shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering
as a result of sales made at prices lower than the prices they paid.
A large number of shares may be sold in
the market following this offering, which may depress the market price of our ordinary shares.
All of our ordinary shares
sold in the offering will be freely tradable without restriction or further registration under the Securities Act. As a result, a substantial
number of our ordinary shares may be sold in the public market following this offering, which may cause the market price of our ordinary
shares to decline. If there are more ordinary shares offered for sale than buyers are willing to purchase, then the market price of our
ordinary shares may decline to a market price at which buyers are willing to purchase the offered ordinary shares and sellers remain willing
to sell the ordinary shares.
The actual number of shares we will issue
under the ATM Agreement, at any one time or in total, is uncertain.
Subject to certain limitations
in the ATM Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the Agent at any time
and from time to time during the term of the ATM Agreement. The actual number of ordinary shares we will sell to or through the Agent
on our behalf pursuant to any placement notice we deliver to the Agent will depend on the market price of the ordinary shares during the
periods in which sales are made and any restrictions or limitations applicable to such sales, such as a minimum price below which sales
may not be made, that we may include in such placement notice or that otherwise apply under the ATM Agreement. Because the price per share
will fluctuate based on the market price of our ordinary shares during the sales period, it is not possible at this stage to predict the
number of shares that will ultimately be issued.
If we fail to meet all applicable Nasdaq Capital Market requirements,
Nasdaq could delist our ordinary shares, which could adversely affect the market liquidity of our ordinary shares and the market price
of our ordinary shares could decrease.
Nasdaq monitors our ongoing compliance with its
minimum listing requirements and if we fail to meet those requirements and cannot cure such failure in the prescribed period of time,
our ordinary shares could be subject to delisting from the Nasdaq market. In the event that our ordinary shares are delisted from the
Nasdaq Capital Market and are not eligible for quotation or listing on another market or exchange, trading of our ordinary shares could
be conducted only in the over-the-counter market such as the OTC Pink or the OTCQB. In such event, it could become more difficult to dispose
of, or obtain accurate price quotations for, our ordinary shares, and there would likely also be a reduction in our coverage by securities
analysts and the news media, which could cause the price of our ordinary shares to decline further. Also, it may be difficult for us to
raise additional capital if we are not listed on a major exchange.
On March 8, 2023, we received a written notice from
The Nasdaq Stock Market indicating that we were not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing
Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. The notice provided that we have until September 5, 2023 to regain
compliance. If at any time during this period the closing bid price of our ordinary shares are at least $1.00 per share for a minimum
of 10 consecutive business days, Nasdaq will provide us with a written confirmation of compliance and the matter will be closed.
We will need additional
capital in the future. Raising additional capital by issuing securities may cause dilution to existing shareholders.
We
have incurred losses every year since our inception. If we continue to use cash at our historical rates of use we will need significant
additional financing, which we may seek through a combination of private and public equity offerings, debt financings and collaborations
and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt
securities, an existing shareholder’s ownership interest will be diluted, and the terms of any such offerings may include liquidation
or other preferences that may adversely affect the then existing shareholders rights. Debt financing, if available, would result in increased
fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions
such as incurring debt or making capital expenditures. If we raise additional funds through collaboration, strategic alliance or licensing
arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates,
or grant licenses on terms that are not favorable to us.
We do not know
whether a market for our ordinary shares will be sustained or what the trading price of our ordinary shares will be and as a result it
may be difficult for you to sell your ordinary shares.
Although
our ordinary shares are listed on Nasdaq, an active trading market for the ordinary shares may not be sustained. It may be difficult for
you to sell your ordinary shares without depressing the market price for the ordinary shares or at all. Further, an inactive market may
also impair our ability to raise capital by selling ordinary shares and may impair our ability to enter into strategic partnerships or
acquire companies, products, or services by using our equity securities as consideration.
The exercise of outstanding warrants will cause significant dilution to holders of our equity securities and could adversely affect
the price of our ordinary shares. ,
As of May 2, 2023, holders of warrants and pre-funded warrants may exercise
their warrants into up to 9,500,188 ordinary shares. In the event that such warrants are exercised in full, the ownership interest of
existing holders of our equity securities will be diluted and may have a negative effect on the trading price of our ordinary shares.
We
are party to a lawsuit brought against by us a warrant holder.
In connection with a joint venture
transaction, entered on May 15, 2020, by and between us, Capital Point Ltd., or Capital Point, and Evero Health Ltd., one of our subsidiaries, in
2020 we issued a warrant to Capital Point to purchase $340,000 of our ordinary shares, or the Warrant Shares, with an exercise price per
ordinary share equal to the closing price of our ordinary shares on the trading day on which the notice of exercise is actually received
by us. Such warrant was exercisable for 12 months starting from May 15, 2021. On November 4, 2021, we received from Capital Point
a notice of exercise with respect to the Warrant Shares, which was rejected by the Company. On May 2, 2023, Capital Point filed a lawsuit
in the Tel Aviv-Jaffa District Court against us as the sole defendant in connection with the warrant we issued to Capital Point. The lawsuit
includes allegations of breaches of contract under the Israeli Contracts Law (General Part), 1973, unjust enrichment under the Israeli
Unjust Enrichment Law, 1979 and breaches under the Israeli Torts Ordinance (New Version), 1968. The lawsuit claims damages in the amount
of NIS 10,000,000 (approximately $2.75 million), which accounts for, as of the date of the filing of the lawsuit, liquidated damages
according to the provisions set forth in the warrant, and seeks as well for the court to order a mandatory injunction order for us to
issue the Warrant Shares to Capital Point., the return of any unlawful profits received by us and punitive damages. As of the date of
this prospectus, we cannot predict the likelihood of our success in the lawsuit.
The market price
of our securities may be highly volatile, and you may not be able to resell your ordinary shares at or above the price you paid.
The
market price of our ordinary shares is volatile. Our ordinary share price is and will continue to be subject to wide fluctuations in response
to a variety of factors, including the following:
| |
● |
adverse results or delays in preclinical studies or clinical trials; |
| |
|
|
| |
● |
reports of adverse events in our product candidates or clinical trial failures of our product candidates; |
| |
|
|
| |
● |
inability to obtain additional funding; |
| |
● |
any delay in filing a regulatory submission for any of our product or product candidates and any adverse development or perceived adverse development with respect to the review of that regulatory submission by the U.S. Food and Drug Administration or European or Asian authorities; |
| |
|
|
| |
● |
failure to successfully develop and commercialize our products or product candidates; |
| |
● |
failure to enter into strategic collaborations; |
| |
|
|
| |
● |
failure by us or strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights; |
| |
|
|
| |
● |
changes in laws or regulations applicable to future products; |
| |
|
|
| |
● |
inability to scale up our manufacturing capabilities through third-party manufacturers, inability to obtain adequate product supply for our products or the inability to do so at acceptable prices; |
| |
|
|
| |
● |
introduction of new products or technologies by our competitors; |
| |
|
|
| |
● |
failure to meet or exceed financial projections we may provide to the public; |
| |
|
|
| |
● |
failure to meet or exceed the financial expectations of the investment community; |
| |
|
|
| |
● |
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by our competitors; |
| |
|
|
| |
● |
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our platform technologies, technologies, products or product candidates; |
| |
|
|
| |
● |
additions or departures of key scientific or management personnel; |
| |
|
|
| |
● |
significant lawsuits, including patent or shareholder litigation; |
| |
|
|
| |
● |
changes in the market valuations of similar companies; |
| |
|
|
| |
● |
changes in general conditions in the economy and the financial markets, including as a result of COVID-19; |
| |
|
|
| |
● |
sales of our securities by us or our shareholders in the future; and |
| |
|
|
| |
● |
trading volumes of our securities. |
USE OF PROCEEDS
We may issue and sell our
ordinary shares having aggregate sales proceeds of up to $1,729,964 from time to time.
Because there is no minimum
offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us,
if any, are not determinable at this time. There can be no assurance that we will sell any shares under or fully utilize the ATM Agreement
as a source of financing. We estimate that the net proceeds from the sale of the ordinary shares that we are offering may be up to $1,493,466
after deducting the Agent’s commission and estimated offering expenses payable by us, assuming we sell the maximum amount under
the ATM Agreement.
We intend to use the net proceeds
from the sale of our securities for working capital, which includes research and development, to advance our technology and general corporate
purposes and pursuing strategic opportunities including expanding our pipeline and investments in other companies which may not be aligned
with our current business strategy. At this time, we have not identified any potential investments, and we can provide no assurance that
we will be able to complete any potential investments that we are able to identify. As of the date of this prospectus supplement, we cannot
specify with certainty all of the particular uses for the net proceeds to us from this offering. Accordingly, our management will have
broad discretion in the application of these proceeds.
CAPITALIZATION
The following table sets forth
our cash and cash equivalents and our capitalization as of December 31, 2022:
| |
● |
on an actual basis; and |
| |
|
|
| |
● |
on an as adjusted basis assuming our issuance and sale of 2,745,975 ordinary shares at an assumed offering price of $0.63 per share, which was the closing price per shares on the Nasdaq on May 8, 2023, resulting in proceeds of $1,493,466, net of estimated expenses and sales agent transaction fees of $236,498. |
You should read this table
in conjunction with “Item 5. Operating and Financial Review and Prospects” and our financial statements and related notes
included in our 2022 Annual Report, incorporated by reference herein.
| |
|
As of December 31,
2022 |
|
| USD in thousands |
|
Actual |
|
|
As
Adjusted |
|
| Cash and cash equivalents |
|
$ |
3,574 |
|
|
$ |
5,067 |
|
| Total assets |
|
$ |
10,605 |
|
|
$ |
12,098 |
|
| Total liabilities |
|
$ |
4,156 |
|
|
$ |
4,156 |
|
| Shareholders’ equity: |
|
|
|
|
|
|
|
|
| Share capital and premium |
|
$ |
58,592 |
|
|
$ |
60,085 |
|
| Ordinary shares, no par value: 25,714,285 ordinary shares authorized (actual, and as adjusted); 6,798,840 ordinary shares issued and outstanding (actual); 9,544,816 ordinary shares outstanding (as adjusted) |
|
|
|
|
|
|
|
|
| Reserve for share-based payment transactions |
|
$ |
5,180 |
|
|
$ |
5,180 |
|
| Warrants |
|
$ |
5,190 |
|
|
$ |
5,190 |
|
| Foreign currency translation reserve |
|
$ |
497 |
|
|
$ |
497 |
|
| Transactions with non-controlling interests |
|
$ |
559 |
|
|
$ |
559 |
|
| Accumulated loss |
|
$ |
(63,569 |
) |
|
$ |
(63,569 |
) |
| Total equity |
|
|
6,449 |
|
|
|
7,942 |
|
The table above is based on
6,798,840 ordinary shares outstanding as of December 31, 2022. This number excludes:
| |
● |
183,284 ordinary shares issuable upon the exercise of options outstanding under our 2015 Share Option Plan, at a weighted average exercise price of $6.38 per share; |
| |
|
|
| |
● |
173,869 ordinary shares reserved for issuance and available for future grant under our 2015 Share Option Plan; |
| |
|
|
| |
● |
9,482,032 ordinary shares issuable upon the exercise of outstanding warrants, with exercise prices ranging from $2.63 to $24.50 per ordinary share; and |
| |
|
|
| |
● |
18,156 ordinary shares issuable upon the exercise of outstanding pre-funded warrants, with an exercise price of $0.001 per ordinary share. |
DILUTION
Dilution with respect
to net tangible book value per share represents the difference between the price per share paid by the purchasers of the ordinary shares
sold in this offering and the net tangible book value per ordinary share immediately after this offering. Net tangible book value per
share is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference
by the number of ordinary shares deemed to be outstanding at that date.
Our historical net tangible
book value as of December 31, 2022 was approximately $1,732,000 or $0.26 per share.
After giving effect to
the assumed sale of 2,745,975 ordinary shares in this offering at an assumed offering price of $0.63 per share, the last reported sale
price of our ordinary shares on Nasdaq on May 8, 2023, and after deducting estimated commissions and offering expenses payable by us,
our as adjusted net tangible book value as of December 31, 2022 would have been approximately $3,225,467, or $0.34 per share. This represents
an immediate increase in as adjusted net tangible book value of $0.08 per share to existing stockholders and immediate dilution of $0.29
per share to new investors purchasing ordinary shares in this offering at the assumed offering price.
The following table illustrates
this calculation on a per share basis. The as adjusted information is illustrative only and will adjust based on the actual public offering
price, the actual number of shares sold and other terms of the offering determined at the time our ordinary shares are sold pursuant to
this prospectus supplement. The as adjusted information assumes that all ordinary shares in the aggregate amount of $1,729,964 are sold
at the assumed public offering price of $0.63 per share, the last reported sale price of our ordinary shares on Nasdaq on May 8, 2023.
The ordinary shares sold in this offering, if any, will be sold from time to time at various prices.
| Assumed public offering price per share | |
| | | |
$ | 0.63 | |
| Historical net tangible book value per share as of December 31, 2022 | |
$ | 0.26 | | |
| | |
| Increase in net tangible book value per share after giving effect to this offering | |
$ | 0.08 | | |
| | |
| As adjusted net tangible book value per share as of December 31, 2022, after giving effect to this offering | |
| | | |
$ | 0.34 | |
| Dilution in adjusted net tangible book value per share to new investors purchasing our ordinary shares in this offering | |
| | | |
$ | 0.29 | |
The
above discussion and table are based on 6,798,840 ordinary shares outstanding as of December 31, 2022. This number excludes:
| |
● |
183,284 ordinary shares issuable upon the exercise of options outstanding under our 2015 Share Option Plan, at a weighted average exercise price of $6.38 per share; |
| |
|
|
| |
● |
173,869 ordinary shares reserved for issuance and available for future grant under our 2015 Share Option Plan; |
| |
|
|
| |
● |
9,482,032 ordinary shares issuable upon the exercise of outstanding warrants, with exercise prices ranging from $2.63 to $24.50 per ordinary share; and |
| |
|
|
| |
● |
18,156 ordinary shares issuable upon the exercise of outstanding pre-funded warrants, with an exercise price of $0.001 per ordinary share. |
DESCRIPTION OF OUR SECURITIES
The material
terms and provisions of our ordinary shares are described under the heading “Description of Securities-Ordinary Shares” in
the accompanying prospectus.
PLAN OF DISTRIBUTION
We have entered into the ATM
Agreement with Aegis Capital Corp. as Agent, under which we may issue and sell ordinary shares from time to time through the Agent acting
as a sales agent, including sales having an aggregate gross sales price of up to $1,729,964 pursuant to this prospectus supplement.
The Agent may sell the ordinary
shares by any method that is deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities
Act. Subject to the terms of the placement notice, Aegis may also sell the ordinary shares by any other method permitted by law, including
in privately negotiated transactions.
The Agent will offer the ordinary
shares subject to the terms and conditions of the ATM Agreement on a daily basis or as otherwise agreed upon by us and the Agent. We will
designate the maximum number of ordinary shares to be sold through the Agent on a daily basis or otherwise determine such maximum number
together with the Agent. Subject to the terms and conditions of the ATM Agreement, the Agent will use its commercially reasonable efforts
to sell on our behalf all of the ordinary shares so designated or determined. We may instruct the Agent not to sell ordinary shares if
the sales cannot be effected at or above the price designated by us in any such instruction. We or the Agent may suspend the offering
of ordinary shares being made through the Agent under the ATM Agreement upon proper notice to the other party.
We will pay the Agent commissions,
in cash, for its services in acting as agent in the sale of our ordinary shares. Aegis will be entitled to compensation at a fixed commission
rate of 5.0% of the aggregate gross proceeds from each sale of our ordinary shares. Because there is no minimum offering amount required
as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable
at this time. We have also agreed to reimburse Aegis for certain specified fees and documented expenses, including the fees and documented
expenses of its legal counsel and non-accountable expenses in an amount not to exceed $60,000, plus an additional amount not to exceed
$10,000 per bi-annual period on an ongoing basis during the term of the ATM Agreement, as provided in the ATM Agreement. We estimate that
the total expenses for the offering, excluding compensation and reimbursements payable to the Agent under the terms of the ATM Agreement,
will be approximately $65,000.
Settlement for sales of ordinary
shares will occur on the second trading day following the date on which any sales are made, or on some other date that is agreed upon
by us and the Agent in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our ordinary
shares as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or by such
other means as we and the Agent may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
The Agent is not required
to sell any certain number of shares or dollar amount of our ordinary shares, but the Agent will use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell on our behalf all of the ordinary shares requested to be sold by us, subject
to the conditions set forth in the ATM Agreement. In connection with the sale of the ordinary shares on our behalf, the Agent will be
deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the Agent will be deemed to
be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to the Agent against certain civil
liabilities, including liabilities under the Securities Act.
The offering of our ordinary
shares pursuant to the ATM Agreement will terminate as permitted therein.
This summary of the material
provisions of the ATM Agreement does not purport to be a complete statement of its terms and conditions. We will file a copy of the ATM
Agreement as an exhibit to a report under the Exchange Act with the SEC, which will, upon filing, be incorporated by reference into this
prospectus supplement. See the section below entitled “Where You Can Find More Information.”
LEGAL MATTERS
Certain legal matters concerning
this prospectus will be passed upon for us by Sullivan & Worcester LLP, New York, New York. Certain legal matters with respect to
the validity of the ordinary shares offered in this prospectus supplement will be passed upon for us by Meitar | Law Offices, Ramat Gan,
Israel. Sichenzia Ross Ference LLP, New York, New York is counsel for the Agent in connection with this offering.
EXPERTS
The consolidated financial
statements of SciSparc Ltd. appearing in our 2022 Annual Report for the year ended December 31, 2022 have been audited by Kost Forer Gabbay
& Kasierer, a member firm of Ernst & Young Global, an independent registered public accounting firm, as set forth in their report
thereon, included therein. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given
on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational
requirements of the Exchange Act as applicable to foreign private issuers. Our Annual Report on Form 20-F for the year ended December
31, 2022 has been filed with the SEC. The Company has also filed reports with the SEC on Form 6-K. The SEC maintains an Internet website
that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website
is www.sec.gov.
As a foreign private issuer,
we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and
our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions
contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial
statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
This prospectus supplement
and the accompanying prospectus are part of a registration statement on Form F-3 that we filed with the SEC to register the securities
to be offered hereby. This prospectus supplement and the accompanying prospectus do not contain all of the information included in the
registration statement, including certain exhibits and schedules. You may obtain the registration statement and exhibits to the registration
statement from the SEC’s website listed above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with it, which means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be part of this prospectus and information we file later with
the SEC will automatically update and supersede this information. The information incorporated by reference is considered to be part of
this prospectus supplement and the accompanying prospectus and information we file later with the SEC will automatically update and supersede
this information. The documents we are incorporating by reference as of their respective dates of filing are:
| ● | our Annual Report on Form 20-F for the year ended December
31, 2022, filed on May 1, 2023; |
| ● | the description of our securities contained in our Form 8-A
filed on December 20, 2021 (File No. 001-38041), including as amended by Exhibit 2.1 to our Annual Report on Form 20-F filed on May 1,
2023 and any further amendment or report filed for the purpose of updating such description. |
All subsequent annual reports
filed by us pursuant to the Exchange Act on Form 20-F prior to the termination of the offering shall be deemed to be incorporated by reference
to this prospectus supplement and the accompanying prospectus and to be a part hereof from the date of filing of such documents. We may
also incorporate part or all of any Form 6-K subsequently submitted by us to the SEC prior to the termination of the offering by identifying
in such Forms 6-K that they, or certain parts of their contents, are being incorporated by reference herein, and any Forms 6-K so identified
shall be deemed to be incorporated by reference in this prospectus supplement and the accompanying prospectus and to be a part hereof
from the date of submission of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this prospectus supplement and the accompanying prospectus to the
extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus.
We will provide you without
charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus supplement or the
accompanying prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents.
Please direct your written or telephone requests to us at: SciSparc Ltd., 20 Raul Wallenberg Street, Tower A, Tel Aviv, 6971916 Israel.
Attention: Oz Adler, Chief Executive Officer and Chief Financial Officer, telephone number: (+972) (3) 610-3100.
PROSPECTUS
$50,000,000
SCISPARC LTD.
Ordinary Shares
Warrants
Units
We may offer and sell from
time to time in one or more offerings up to the total amount of $50,000,000 of our ordinary shares, no par value, or the Ordinary Shares,
warrants or units comprising a combination of Ordinary Shares and warrants. Each time we sell securities pursuant to this prospectus,
we will provide in a supplement to this prospectus the price and any other material terms of any such offering. We may also authorize
one or more free writing prospectuses to be provided to you in connection with each offering. Any prospectus supplement and related free
writing prospectuses may also add, update or change information contained in the prospectus. You should read this prospectus, any applicable
prospectus supplement and related free writing prospectuses, as well as the documents incorporated by reference or deemed incorporated
by reference into this prospectus, carefully before you invest in the securities.
Our Ordinary Shares have been
listed on the Nasdaq Capital Market, or Nasdaq, since December 22, 2021 under the symbol “SPRC.” On February 15, 2023, the
last reported sale price of our Ordinary Shares was $0.93 per share.
On February 15, 2023, the aggregate
market value of our Ordinary Shares held by non-affiliates was $7,330,131, based on 6,860,090 Ordinary Shares outstanding and a per share
price of $1.07 based on the closing sale price of our Ordinary Shares on January 17, 2023. We have not offered any securities pursuant
to General Instruction I.B.5 on Form F-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus.
Investing in the securities
involves a high degree of risk. Risks associated with an investment in the securities will be described in any applicable prospectus supplement
and are and will be described in certain of our filings with the Securities and Exchange Commission, or SEC, as described in “Risk
Factors” on page 3 of this prospectus.
The securities may be sold
directly by us to investors, through agents designated from time to time or to or through underwriters or dealers, or through a combination
of such methods, on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section
entitled “Plan of Distribution” in this prospectus. If any agents or underwriters are involved in the sale of the securities
with respect to which this prospectus is being delivered, the names of such agents or underwriters and any applicable fees, commissions,
discounts and over-allotment options will be set forth in a prospectus supplement. The price to the public of the securities and the net
proceeds that we expect to receive from such sale will also be set forth in a prospectus supplement.
Neither the SEC nor any
state or other securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus
is February 23, 2023
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This prospectus is part of
a registration statement on Form F-3 that we filed with the SEC utilizing a “shelf” registration process. Under this shelf
registration process, we may offer from time to time up to an aggregate of $50,000,000 of the Ordinary Shares, warrants or units comprising
a combination of Ordinary Shares and warrants in one or more offerings. We sometimes refer to the Ordinary Shares, warrants and units
as the “securities” throughout this prospectus.
Each time we sell securities,
we will provide you with a prospectus supplement that will describe the specific amounts, prices and terms of such offering. We may also
authorize one or more free writing prospectuses to be provided to you in connection with such offering. The prospectus supplement and
any related free writing prospectuses may also add, update or change information contained in this prospectus. You should read carefully
both this prospectus, the applicable prospectus supplement, the documents incorporated by reference into this prospectus and any related
free writing prospectus together with additional information described below under “Where You Can Find More Information” and
“Incorporation of Certain Information by Reference” before buying the securities being offered.
This prospectus does not contain
all of the information provided in the registration statement that we filed with the SEC. For further information about us or the securities,
you should refer to that registration statement, which you can obtain from the SEC as described below under “Where You Can Find
More Information” and “Incorporation of Certain Information by Reference.”
You should rely only on the
information contained or incorporated by reference in this prospectus, a prospectus supplement and related free writing prospectuses.
Neither we, nor any agent, underwriter or dealer has authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should not
assume that the information contained in this prospectus and the accompanying prospectus supplement or related free writing prospectuses
is accurate on any date subsequent to the date set forth on the front of the document or that any information that we have incorporated
by reference is correct on any date subsequent to the date of the document incorporated by reference. Our business, financial condition,
results of operations and prospects may have changed since those dates.
In this prospectus, references
to the terms “SciSparc,” “the Company,” “we,” “us,” “our” and similar terms,
refer to SciSparc Ltd., unless we state or the context implies otherwise. References to “Ordinary Shares” mean our Ordinary
Shares, no par value.
Our reporting currency and
functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus
to “NIS” are to New Israeli Shekels, and references to “dollars” or “$” mean U.S. dollars.
This prospectus incorporates by reference statistical,
market and industry data and forecasts which we obtained from publicly available information and independent industry publications and
reports that we believe to be reliable sources. These publicly available industry publications and reports generally state that they obtain
their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the information.
Although we believe that these sources are reliable, we have not independently verified the information contained in such publications.
We report under International
Financial Reporting Standards as issued by the International Accounting Standards Board, or the IASB. None of the financial statements
were prepared in accordance with generally accepted accounting principles in the United States.
ABOUT SCISPARC LTD.
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 following pharmaceutical compositions comprising N-acylethanolamines and cannabinoids, such
as Palmitoylethanolamide and/or Δ9-tetrahydrocannabinol and/or non-psychoactive cannabidiol and/or other cannabinoid receptor agonists:
SCI-110 for the treatment of Tourette syndrome and Alzheimer’s disease and agitation; SCI-160 for the treatment of pain; and SCI-210
for the treatment of Autism Spectrum Disorder and Status Epilepticus. We also have a wholly-owned subsidiary whose business focusses
on the sale of hemp-based products on the Amazon.com marketplace.
Our Ordinary Shares are listed
on the Nasdaq under the symbol “SPRC”. Our principal executive offices are located at 20
Raul Wallenberg St., Tower A, 2nd Floor, Tel Aviv 6971916 Israel. Our telephone number in Israel is: (+972) (3)
717 5777. Our website address is http://www.scisparc.com. The information contained on our
website or available through our website is not incorporated by reference into and should not be considered a part of this prospectus.
RISK
FACTORS
Investing in our securities
involves risks. You should consider carefully the risk factors described in our periodic reports filed with the SEC, including those set
forth under the caption “Item 3. Key Information - D. Risk Factors” in our most recent Annual Report on Form 20-F for the
year ended December 31, 2021, or the 2021 Annual Report, or any updates in our Reports of Foreign Private Issuer on Form 6-K, which are
incorporated by reference in this prospectus, together with all of the other information appearing in this prospectus or incorporated
by reference into this prospectus and any applicable prospectus supplement, in light of your particular investment objectives and financial
circumstances. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also impair
our business operations. If any of these risks actually occur, our business, financial condition, operating results or cash flows could
be materially adversely affected. This could cause the trading price of our securities to decline, and you may lose all or part of your
investment. The discussion of risks includes or refers to forward-looking statements; you should read the explanation of the qualifications
and limitations on such forward-looking statements discussed elsewhere in this prospectus.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains,
and any accompanying prospectus supplement will contain, forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
and the Private Securities Litigation Reform Act of 1995. Also, documents that we incorporate by reference into this prospectus, including
documents that we subsequently file with the SEC, contain and will contain forward-looking statements. Forward-looking statements are
those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify
forward-looking statements as statements containing the words “may,” “will,” “could,” “should,”
“expect,” “anticipate” “objective,” “goal,” “intend,” “estimate,”
“believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those
expressions, although not all forward-looking statements contain these identifying words. All statements contained or incorporated by
reference in this prospectus and any prospectus supplement regarding 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.
You should not place undue
reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions,
including in many cases decisions or actions by third parties, that are difficult to predict. Our forward-looking statements are based
on the information currently available to us and speak only as of the date on the cover of this prospectus, the date of any prospectus
supplement, or, in the case of forward-looking statements incorporated by reference, the date of the filing that includes the statement.
Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements,
and such difference might be significant and materially adverse to our security holders. We undertake no obligation to update publicly
any forward-looking statements, whether as a result of new information, future events or otherwise.
We have identified some of
the important factors that could cause future events to differ from our current expectations and they are described in this prospectus
and supplements to this prospectus (if any) under the caption “Risk Factors,” “Use of Proceeds,” and elsewhere
in this prospectus, as well as in our most recent Annual Report on Form 20-F, including without limitation under the captions “Risk
Factors” and “Operating and Financial Review and Prospects,” and in other documents that we may file with the SEC, all
of which you should review carefully. Please consider our forward-looking statements in light of those risks as you read this prospectus,
the documents incorporated by reference herein, and any prospectus supplement.
capitalization
The following table sets forth
our cash and cash equivalents and our capitalization as of June 30, 2022. You should read this table in conjunction with “Item 5.
Operating and Financial Review and Prospects” and our financial statements and related notes included in our 2021 Annual Report,
incorporated by reference herein, and our unaudited financial results as of and for the six months ended June 30, 2022, furnished with
the SEC on December 29, 2022, which are incorporated by reference herein.
| | |
As of June 30,
2022 | |
| U.S. dollars in thousands | |
(Unaudited) | |
| | |
| |
| Cash and cash equivalents | |
$ | 12,945 | |
| Total assets | |
| 14,422 | |
| Total liabilities | |
| 11,385 | |
| | |
| | |
| Shareholders’ equity: | |
| | |
| Share capital and premium | |
| 58,547 | |
| Ordinary Shares, no par value: 25,714,285 Ordinary Shares authorized; 3,526,740 Ordinary Shares issued and outstanding | |
| | |
| Reserve from share-based payment transactions | |
| 4,980 | |
| Warrants | |
| 5,190 | |
| Foreign currency translation reserve | |
| 497 | |
| Transactions with non-controlling interests | |
| 559 | |
| Accumulated deficit | |
| (66,736 | ) |
| | |
| | |
| Total equity | |
$ | 3,037 | |
USE OF PROCEEDS
Unless otherwise indicated
in an accompanying prospectus supplement, the net proceeds from the sale of securities will be used for working capital, which includes
research and development, to advance our technology and general corporate purposes and pursuing strategic opportunities including expanding
our pipeline. Our management will have significant flexibility in applying the net proceeds of this offering.
DESCRIPTION OF SECURITIES
The
descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material
terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating
to any securities the particular terms of the securities offered by that prospectus supplement. If we so indicate in the applicable prospectus
supplement, the terms of the securities may differ from the terms we have summarized below.
We
may sell from time to time, in one or more offerings, Ordinary Shares, warrants to purchase Ordinary Shares or units comprising a combination
of Ordinary Shares and warrants.
In this prospectus, we refer
to the Ordinary Shares and warrants to purchase Ordinary Shares and units that may be offered by us collectively as “securities.”
The total dollar amount of all securities that we may issue under this prospectus will not exceed $50,000,000. The actual price per share
of the shares that we will offer, or per security of the securities that we will offer, pursuant hereto will depend on a number of factors
that may be relevant as of the time of offer.
This prospectus may not be
used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
Ordinary Shares
General
The following are summaries
of material provisions of our articles of association, or Articles, and the Israeli Companies Law 5759-1999, or the Companies Law, insofar
as they relate to the material terms of our Ordinary Shares, and do not purport to be complete.
As of
February 15, 2023, our authorized share capital consists of 75,000,000 Ordinary Shares, no par value per share. As of February 15, 2023,
6,860,090 Ordinary Shares were issued and outstanding. All of our outstanding Ordinary Shares are validly issued, fully paid and non-assessable.
Our Ordinary Shares are not redeemable and do not have any pre-emptive rights.
Registration Number and Purposes of
the Company
Our registration number
with the Israeli Registrar of Companies is 51-358165-2. Our purpose as set forth in our Articles is to engage in any lawful activity.
Liability to further capital calls
Our board of directors may
make, from time to time, such calls as it may deem fit upon shareholders with respect to any sum unpaid with respect to shares held by
such shareholders which is not payable at a fixed time. Such shareholder has to pay the amount of every call so made upon him or her.
Voting Rights
All our Ordinary Shares
have identical voting and other rights in all respects.
Quorum requirements
Pursuant to our Articles,
holders of our Ordinary Shares have one vote for each ordinary share held on all matters submitted to a vote before the shareholders at
a general meeting. The quorum required for our general meetings of shareholders consists of at least two shareholders, present in person
or by proxy, holding at least fifteen percent (15%) of the voting rights of the Company. A meeting adjourned for lack of a quorum will
be adjourned for one day at the same time and place, or to such other day, time or place if such is stated in the notice of the meeting.
At the reconvened meeting, if a quorum is not present within a half an hour, any number of shareholders present in person or by proxy
will constitute a lawful quorum.
Vote requirements
Our Articles provide that
all resolutions of our shareholders require a simple majority vote, unless otherwise required by the Companies Law or by our Articles.
Under the Companies Law, each of (i) the approval of an extraordinary transaction with a controlling shareholder and (ii) the terms of
employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative (even if
not extraordinary) requires a special majority approval. Certain transactions with respect to remuneration of our office holders and directors
require further approvals as set forth in Companies Law. Another exception to the simple majority vote requirement is a resolution for
the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Companies
Law, which requires the approval of the majority of the shareholders voting their shares, other than abstainees, holding at least 75%
of the voting rights represented at the meeting, in person, by proxy or by voting deed and voting on the resolution.
Dividend and liquidation rights
We may declare a dividend
to be paid to the holders of our Ordinary Shares in proportion to their respective shareholdings. Under the Companies Law, dividend distributions
are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles
of association provide otherwise. Our Articles do not require shareholder approval of a dividend distribution and provide that dividend
distributions may be determined by our board of directors.
Pursuant to the Companies
Law, the distribution amount is limited to the greater of retained earnings or earnings generated over the previous two years, according
to our then last reviewed or audited consolidated financial statements, provided that the date of the financial statements is not more
than six months prior to the date of the distribution, or we may distribute dividends that do not meet such criteria only with court approval.
In each case, we are only permitted to distribute a dividend if our board of directors and the court, if applicable, determines that there
is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they
become due.
In the event of our liquidation,
after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our Ordinary Shares in proportion to
their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution
rights to the holders of a class of shares with preferential rights that may be authorized in the future.
Exchange controls
There are currently no Israeli
currency control restrictions on remittances of dividends on our Ordinary Shares, proceeds from the sale of the shares or interest or
other payments to non-residents of Israel, except for shareholders who are subjects of certain countries that are, or have been, in a
state of war with Israel.
Election of directors
Under our Articles, our board
of directors must consist of at least three (3) and not more than eight (8) directors, including, if applicable, two external directors
appointed as required under the Companies Law. Other than our external directors (if any), our directors are divided into three classes
with staggered three-year terms. Each class of directors consists, as nearly as possible, of one third of the total number of directors
constituting the entire board of directors. At each annual general meeting of our shareholders, the election or re-election of directors
following the expiration of the term of office of the directors of that class of directors is for a term of office that expires on the
third annual general meeting following such election or re-election, such that at each annual general meeting the term of office of only
one class of directors will expire. Each director, holds office until the annual general meeting of our shareholders for the year in which
his or her term expires and until his or her successor is duly appointed, unless the tenure of such director expires earlier pursuant
to the Companies Law upon the occurrence of certain events or unless removed from office by a vote of the holders of at least 65% of the
total voting power of our shareholders at a general meeting of our shareholders in accordance with our Articles.
Our Articles provide that
directors are appointed by a simple majority vote of holders of our Ordinary Shares, participating and voting at an annual general meeting
of our shareholders. In the event of a contested election, the board of directors may, in its discretion, set the method of calculation
of the votes and the manner in which the resolutions will be presented to our shareholders at the general meeting. In the event that our
board of directors does not or is unable to make a determination on such matter, then the directors will be elected by a plurality of
the voting power represented at the general meeting in person or by proxy and voting on the election of directors.
In addition, if a director’s
office becomes vacant, the remaining serving directors may continue to act in any manner, provided, that the number of the serving directors
shall not be less than three (3). If the number of serving directors is lower than their minimal one, the board of directors shall not
be permitted to act, other than for the purpose of convening a general meeting of the Company’s shareholders for the purpose of
appointing additional directors.
Shareholder meetings
Under the Companies Law, we
are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later than 15 months
after the date of the previous annual general meeting. All general meetings other than the annual meeting of shareholders are referred
to in our Articles as special general meetings. Our board of directors may call special general meetings whenever it sees fit, at such
time and place, within or outside of Israel, as it may determine. In addition, the Companies Law provides that our board of directors
is required to convene a special meeting upon the written request of (i) any two of our directors or one-quarter of the members of our
board of directors or (ii) one or more shareholders holding, in the aggregate, either (a) 5% or more of our outstanding issued shares
and 1% or more of our outstanding voting power or (b) 5% or more of our outstanding voting power.
Under the Companies Law, one
or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors include a
matter in the agenda of a general meeting to be convened in the future, provided, that it is appropriate to discuss such a matter at the
general meeting.
Subject to the provisions
of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are
the shareholders of record the date determined by the board of directors, which must be between 4 and 40 days prior to the date of the
meeting. Furthermore, the Companies Law requires that resolutions regarding the following matters must be passed at a general meeting
of our shareholders:
| ● | amendments to our Articles; |
| ● | appointment or termination of our auditors; |
| ● | appointment of external directors; |
| ● | approval of certain related party transactions; |
| ● | increases or reductions of our authorized share capital; |
| ● | the exercise of our board of directors’ powers by a
general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our
proper management. |
In addition, pursuant to our
Articles, in order to approve any amendment to our Articles, in addition and prior to the approval of a general meeting of shareholders,
the approval of the board of directors with the affirmative vote of at least three-quarters (3/4) of the directors then in office
and entitled to vote thereon is required.
Under our Articles, we are
not required to give notice to our registered shareholders pursuant to the Companies Law, unless otherwise required by law. The Companies
Law requires that a notice of any annual general meeting or special general meeting be provided to shareholders at least 21 days prior
to the meeting and if the agenda of the meeting includes the appointment or removal of directors, the approval of transactions with office
holders or interested or related parties, or an approval of a merger, or as otherwise required under applicable law, notice must be provided
at least 35 days prior to the meeting.
Access to corporate records
Under the Companies Law, shareholders
are provided access to minutes of our general meetings, our shareholders register and principal shareholders register, our Articles, our
financial statements and any document that we are required by law to file publicly with the Israeli Companies Registrar or the Israel
Securities Authority. In addition, shareholders may request to be provided with any document related to an action or transaction requiring
shareholder approval under the related party transaction provisions of the Companies Law. We may deny this request if we believe it has
not been made in good faith or if such denial is necessary to protect our interest or protect a trade secret or patent.
Modification of class rights
Under the Companies Law and
our Articles, the rights attached to any class of shares, such as voting, liquidation and dividend rights, may be amended by adoption
of a resolution by the holders of a majority of the shares of that class present at a separate class meeting, or otherwise in accordance
with the rights attached to such class of shares, as set forth in our Articles.
Acquisitions under Israeli law
Full tender offer
A person wishing to acquire
shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued and outstanding share
capital is required by the Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of
the issued and outstanding shares of the company. A person wishing to acquire shares of a public Israeli company and who would as a result
hold over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the
shareholders who hold shares of the relevant class for the purchase of all of the issued and outstanding shares of that class. If the
shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable
class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that
the acquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will also be accepted
if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the
applicable class of shares.
Upon a successful completion
of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder accepted the tender offer
or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to determine whether the tender
offer was for less than fair value and that the fair value should be paid as determined by the court. However, under certain conditions,
the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli
court as described above.
If a tender offer is not accepted
in accordance with the requirements set forth above, the acquirer may not acquire shares of the company that will increase its holdings
to more than 90% of the company’s issued and outstanding share capital or of the applicable class from shareholders who accepted
the tender offer.
Special tender offer
The Companies Law provides
that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as a result of the acquisition
the purchaser would become a holder of 25% or more of the voting rights in the company. This requirement does not apply if there is already
another holder of at least 25% of the voting rights in the company. Alternatively, such an acquisition may be approved pursuant to a private
placement approved by the company’s shareholders with the purpose of approving the acquisition of 25% or more, or 45% or more of
the company’s voting rights. Similarly, the Companies Law provides that an acquisition of shares in a public company must be made
by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting
rights in the company, if there is no other shareholder of the company who holds more than 45% of the voting rights in the company, subject
to certain exceptions.
Merger
The Companies Law permits
merger transactions if approved by each party’s board of directors and, unless certain requirements described under the Companies
Law are met, by a majority vote of each party’s shares, and, in the case of the target company, a majority vote of each class of
its shares voted on the proposed merger at a shareholders meeting. The board of directors of a merging company is required pursuant to
the Companies Law to discuss and determine whether in its opinion there exists a reasonable concern that as a result of a proposed merger,
the surviving company will not be able to satisfy its obligations towards its creditors, such determination taking into account the financial
status of the merging companies. If the board of directors has determined that such a concern exists, it may not approve a proposed merger.
For purposes of the shareholder
vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of the shares represented at the
shareholders meeting that are held by parties other than the other party to the merger, or by any person (or group of persons acting in
concert) who holds (or hold, as the case may be) 25% or more of the voting rights or the right to appoint 25% or more of the directors
of the other party, vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder
or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same special majority
approval that governs all extraordinary transactions with controlling shareholders
If the transaction would have been approved by
the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes of certain shareholders
as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company,
if the court holds that the merger is fair and reasonable, taking into account the value to the parties to the merger and the consideration
offered to the shareholders of the company.
Upon the request of a creditor
of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern
that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities, and may further
give instructions to secure the rights of creditors.
In addition, a merger may
not be consummated unless at least 50 days have passed from the date on which a proposal for approval of the merger was filed by each
party with the Israeli Registrar of Companies and at least 30 days have passed from the date on which the merger was approved by the shareholders
of each party.
Significant Transactions
Under our Articles, the affirmative
vote of at least three-quarters (3/4) of the then serving directors is required in order to approve certain transactions which may
have a significant effect on the Company’s structure, assets or business, including mergers acquisitions, consolidations and issuance
of equity securities or debt securities convertible into equity in each case that would reasonably be expected to result in change of
beneficial ownership of above than fifteen percent (15%) in the Company, material changes to the principal business of the Company and
any resolution to transfer the headquarters of the Company outside of Israel.
Business Combinations
Our Articles restrict certain
business transactions with any shareholder and/or its affiliates and/or investors for a period of three years following (i) with
respect to any shareholder of the Company holding fifteen percent (15%) or more of the voting power of the Ordinary Shares as of September
15, 2022 (the effective date of the amended and restated Articles), and (ii) with respect to all shareholders of the Company, each
time as such shareholder and/or any of its affiliates and/or investors become(s) (other than due to a buyback, redemption or cancellation
of shares by the Company) the holder(s) (beneficially or of record) of fifteen percent (15%) or more of the issued and outstanding
voting power of the ordinary shares. The restricted business transactions include mergers, consolidations and dispositions of assets with
an aggregate market value equal to 10% or more of the Company’s assets or outstanding shares.
Borrowing powers
Pursuant to the Companies
Law and our Articles, our board of directors may exercise all powers and take all actions that are not required under law or under our
Articles to be exercised or taken by a certain organ of the Company, including the power to borrow money for company purposes.
Changes in capital
Our Articles enable us to
increase or reduce our share capital. Any such changes are subject to the provisions of the Companies Law and must be approved by a resolution
duly adopted by our shareholders at a general meeting. In addition, transactions that have the effect of reducing capital, such as the
declaration and payment of dividends in the absence of sufficient retained earnings or profits, require the approval of both our board
of directors and an Israeli court.
Transfer agent and registrar
Our transfer agent is and
registrar is Computershare Inc. Its address is 480 Washington Boulevard, Jersey City, New Jersey 07310 and its telephone number is (201)
680-4000.
Warrants
We may issue warrants independently
or together with any other securities offered by any prospectus supplement and the warrants may be attached to or separate from those
securities. We will evidence each series of warrants by warrant certificates that we may issue under a separate agreement or other evidence.
Any series of warrants may be issued under a separate warrant agreement, which may be entered into between us and a warrant agent specified
in an applicable prospectus supplement relating to a particular series of warrants. Any such warrant agent will act solely as our agent
in connection with the warrants of such series and will not assume any obligation or relationship of agency or trust with any of the holders
of the warrants. We may also choose to act as our own warrant agent. We will set forth further terms of the warrants and any applicable
warrant agreements in the applicable prospectus supplement relating to the issuance of any warrants, including, where applicable, the
following:
| ● | the title of the warrants; |
| ● | the aggregate number of the warrants; |
| ● | exchange distributions and/or secondary distributions; |
| ● | the number of securities purchasable upon exercise of the
warrants; |
| ● | the designation and terms of the securities, if any, with
which the warrants are issued, and the number of the warrants issued with each such offered security; |
| ● | the date, if any, on and after which the warrants and the
related securities will be separately transferable; |
| ● | the price at which, and form of consideration for which, each
security purchasable upon exercise of the warrants may be purchased; |
| ● | the date on which the right to exercise the warrants will
commence and the date on which the right will expire; |
| |
● |
if applicable, the date on and after which such warrants and the related securities will be separately transferable; |
| |
|
|
| |
● |
the manner in which the warrants may be exercised, which may include by cashless exercise; |
| |
● |
the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
| |
● |
the terms of any rights to redeem or call the warrants; |
| |
● |
any provisions for changes to or adjustments in the exercise price or number of Ordinary Shares issuable upon exercise of the warrants; |
| |
● |
information with respect to book-entry procedures, if any; |
| |
● |
if applicable, a discussion of the material Israeli and U.S. income tax considerations applicable to the issuance or exercise of such warrants; |
| |
● |
the anti-dilution and adjustment of share capital provisions of the warrants, if any; |
| |
● |
the minimum or maximum amount of the warrants which may be exercised at any one time; |
| |
● |
any circumstances that will cause the warrants to be deemed to be automatically exercised; and |
| |
● |
any other material terms of the warrants. |
Units
We may issue units comprised of one or more of
the other securities that may be offered under this prospectus, in any combination. As specified in the applicable prospectus supplement,
we may issue units consisting of our Ordinary Shares, warrants or any combination of such securities. Each unit will be issued so that
the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations
of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the
unit may not be held or transferred separately at any time, or at any time before a specified date. The applicable prospectus supplement
will describe:
| ● | the terms of the units and of the Ordinary Shares and/or warrants comprising the units, including whether and under what circumstances
the securities comprising the units may be traded separately; |
| ● | a description of the terms of any unit agreement governing the units or any arrangement with an agent that may act on our behalf in
connection with the unit offering; |
| ● | a description of the provisions for the payment, settlement, transfer or exchange of the units; and |
| ● | any material provisions of the governing unit agreement that differ from those described above. |
The description in the applicable
prospectus supplement of any warrants or units we offer will not necessarily be complete and will be qualified in its entirety by reference
to the applicable warrant or unit agreement, which will be filed with the SEC if we offer units. For more information on how you can obtain
copies of the applicable warrant or unit agreement if we offer units, see “Where You Can Find Additional Information.”
PLAN OF DISTRIBUTION
We may sell the securities
being offered hereby in one or more of the following methods from time to time:
| |
● |
through agents to the public or to investors; |
| |
● |
to one or more underwriters for resale to the public or to investors; |
| |
● |
to the extent we are eligible, in “at the market offerings,” within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise; |
| |
● |
directly to investors in privately negotiated transactions; |
| |
● |
directly to a purchaser pursuant to what is known as an “equity line of credit” as described below; or |
| |
● |
through a combination of these methods of sale. |
The securities that we distribute
by any of these methods may be sold, in one or more transactions, at:
| |
● |
a fixed price or prices, which may be changed; |
| |
|
|
| |
● |
market prices prevailing at the time of sale; |
| |
● |
prices related to prevailing market prices; |
| |
● |
upon the exercise of warrants; or |
| |
|
|
| |
● |
negotiated prices. |
The accompanying prospectus
supplement will describe the terms of the offering of our securities, including:
| |
● |
the name or names of any agents or underwriters; |
| |
● |
any securities exchange or market on which the Ordinary Shares may be listed; |
| |
● |
the purchase price and commission, if any, to be paid in connection with the sale of the securities being offered and the proceeds we will receive from the sale; |
| |
● |
the purchase price of the securities being offered and the proceeds we will receive from the sale; |
| |
● |
any options pursuant to which underwriters may purchase additional securities from us; |
| |
● |
any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation; |
| |
● |
any public offering price; and |
| |
● |
any discounts or concessions allowed or reallowed or paid to dealers. |
If underwriters are used in
the sale, they will acquire the securities for their own account and may resell the securities from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of the sale. The obligations
of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement. We
may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without
a syndicate. Subject to certain conditions, the underwriters will be obligated to purchase all the securities offered by the prospectus
supplement. We may change from time to time the public offering price and any discounts or concessions allowed or reallowed or paid to
dealers.
If we use a dealer in the
sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the securities to the dealer,
as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of
resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We may sell the securities
directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and
we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise,
any agent will act on a best-efforts basis for the period of its appointment.
We may also sell securities
pursuant to an “equity line of credit”. In such event, we will enter into a purchase agreement with the purchaser to be named
therein, which will be described in a Report of Foreign Private Issuer on Form 6-K that we will file with the SEC. In that Form 6-K, we
will describe the total amount of securities that we may require the purchaser to purchase under the purchase agreement and the other
terms of purchase, and any rights that the purchaser is granted to purchase securities from us. In addition to our issuance of securities
to the equity line purchaser pursuant to the purchase agreement, this prospectus (and the applicable prospectus supplement or post-effective
amendment to the registration statement of which this prospectus forms a part) also covers the resale of those shares from time to time
by the equity line purchaser to the public. The equity line purchaser will be considered an “underwriter” within the meaning
of Section 2(a)(11) of the Securities Act. Its resales may be effected through a number of methods, including without limitation, ordinary
brokerage transactions and transactions in which the broker solicits purchasers and block trades in which the broker or dealer so engaged
will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction.
The equity line purchaser will be bound by various anti-manipulation rules of the SEC and may not, for example, engage in any stabilization
activity in connection with its resales of our securities and may not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under the Exchange Act.
We may provide underwriters
and agents with indemnification against civil liabilities related to offerings pursuant to this prospectus, including liabilities under
the Securities Act, or contribution with respect to payments that the underwriters or agents may make with respect to these liabilities.
Underwriters and agents may engage in transactions with, or perform services for, us in the ordinary course of business. We will describe
such relationships in the prospectus supplement naming the underwriter or agent and the nature of any such relationship.
Rules of the SEC may limit
the ability of any underwriters to bid for or purchase securities before the distribution of the securities is completed. However, underwriters
may engage in the following activities in accordance with the rules:
| |
● |
Stabilizing transactions — Underwriters may make bids or purchases for the purpose of pegging, fixing or maintaining the price of the shares, so long as stabilizing bids do not exceed a specified maximum. |
| |
● |
Options to purchase additional stock and syndicate covering transactions — Underwriters may sell more securities than the number of shares that they have committed to purchase in any underwritten offering. This creates a short position for the underwriters. This short position may involve either “covered” short sales or “naked” short sales. Covered short sales are short sales made in an amount not greater than the underwriters’ option to purchase additional shares in any underwritten offering. The underwriters may close out any covered short position either by exercising their option or by purchasing shares in the open market. To determine how they will close the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market, as compared to the price at which they may purchase shares through their option. Naked short sales are short sales in excess of the option. The underwriters must close out any naked position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that, in the open market after pricing, there may be downward pressure on the price of the shares that could adversely affect investors who purchase shares in the offering. |
| |
|
|
| |
● |
Penalty bids — If underwriters purchase shares in the open market in a stabilizing transaction or syndicate covering transaction, they may reclaim a selling concession from other underwriters and selling group members who sold those shares as part of the offering. |
Similar to other purchase
transactions, an underwriter’s purchases to cover the syndicate short sales or to stabilize the market price of our securities may
have the effect of raising or maintaining the market price of our securities or preventing or mitigating a decline in the market price
of our securities. As a result, the price of our securities may be higher than the price that might otherwise exist in the open market.
The imposition of a penalty bid might also have an effect on the price of shares if it discourages resales of the shares.
If commenced, the underwriters
may discontinue any of these activities at any time.
Our Ordinary Shares are traded
on Nasdaq. One or more underwriters may make a market in our Ordinary Shares, but the underwriters will not be obligated to do so and
may discontinue market making at any time without notice. We cannot give any assurance as to liquidity of the trading market for our Ordinary
Shares.
Any underwriters who are qualified
market makers on Nasdaq may engage in passive market making transactions in that market in the Ordinary Shares in accordance with Rule 103 of Regulation
M, during the business day prior to the pricing of the offering, before the commencement of offers or sales of the Ordinary Shares. Passive
market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a
passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent
bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain
purchase limits are exceeded.
LEGAL
MATTERS
Certain U.S. legal matters
concerning the issuance of the securities offered by this prospectus were and will be passed upon for us by Sullivan & Worcester
LLP, New York, New York. Certain Israeli legal matters with respect to the legality of the issuance of the securities offered by this
prospectus were and will be passed upon for us by Meitar | Law Offices, Ramat Gan, Israel.
EXPERTS
The consolidated financial
statements of SciSparc Ltd. appearing in our 2021 Annual Report for the year ended December 31, 2021 have been audited by Kost Forer Gabbay
& Kasierer, a member firm of Ernst & Young Global, an independent registered public accounting firm, as set forth in their
report thereon, included therein. Such consolidated financial statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
EXPENSES
We
are paying all of the expenses of the registration of our securities under the Securities Act, including, to the extent applicable, registration
and filing fees, printing fees and expenses, accounting fees and the legal fees of our counsel. We estimate these expenses to be approximately
$34,510 which at the present time include the following categories of expenses:
| Registration fee | |
$ | 5,510 | |
| Printer fees and expenses | |
$ | 5,000 | |
| Legal fees and expenses | |
$ | 15,000 | |
| Accounting fees and expenses | |
$ | 7,500 | |
| Miscellaneous | |
$ | 1,500 | |
| Total | |
$ | 34,510 | |
In addition, we anticipate
incurring additional expenses in the future in connection with the offering of our securities pursuant to this prospectus. Any such additional
expenses will be disclosed in a prospectus supplement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with it, which means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be part of this prospectus and information we file later with
the SEC will automatically update and supersede this information. The information incorporated by reference is considered to be part of
this prospectus and information we file later with the SEC will automatically update and supersede this information. The documents we
are incorporating by reference as of their respective dates of filing are:
| ● | our Annual Report on Form 20-F for the year ended December 31, 2021, filed on April 28, 2022; |
| ● | our Reports of Foreign Private Issuer on Form 6-K filed on: March
17, 2022 (first and second paragraphs and the section titled “Forward-Looking Statements” of Exhibit 99.1 only); May
11, 2022; May 24,
2022; May 26, 2022
(first, third, fourth and fifth paragraphs and the section titled “Forward-Looking Statements” of Exhibit 99.1 only); May
27, 2022; June 1,
2022; June 2, 2022
(first and second paragraphs and the section titled “Forward-Looking Statements” of Exhibit 99.1 only); June
9, 2022 (first, second and third paragraphs and the section titled “Forward-Looking Statements” of Exhibit 99.1
only); June 24, 2022
(first, second, third and sixth paragraphs and the section titled “Forward-Looking Statements” of Exhibit 99.1 only); June
29, 2022 (first, second, fifth and sixth paragraphs and the section titled “Forward-Looking Statements” of Exhibit
99.1 only); July 1, 2022; July
7, 2022; July 7,
2022; August 8, 2022 (first, second, seventh and eighth paragraphs and the section titled “Forward-Looking
Statements” of Exhibit 99.1 only); August
11, 2022; August 12,
2022 (first paragraph and the section titled “Forward-Looking Statements” of Exhibit 99.1 only); August
16, 2022 (first, second, third, fourth, sixth and seventh paragraphs and the section titled “Forward-Looking
Statements” of Exhibit 99.1 only); August
19, 2022; August 25,
2022 (first, second, fourth, fifth and sixth paragraphs and the section titled “Forward-Looking Statements” of
Exhibit 99.1 only); September
16, 2022; September 30,
2022 (with respect to: (i) Exhibit 99.1, the first, second, third, sixth, seventh, eighth and ninth paragraphs and the section
titled “Forward-Looking Statements” only; and (ii) Exhibit 99.6, the first and second paragraphs and the section titled
“Forward-Looking Statements” only)); October
12, 2022; November 1,
2022 (with respect to: (i) Exhibit 99.1, the first and second paragraphs and the section titled “Forward-Looking
Statements” only; and (ii) Exhibit 99.2, the first and second paragraphs and the section titled “Forward-Looking
Statements” only); November
8, 2022; November 16,
2022; November 29,
2022; December 7, 2022
(first, second and third paragraphs and the section titled “Forward-Looking Statements” of Exhibit 99.1 only); December
14, 2022; December
29, 2022; January 9,
2023 (first, second, fourth, fifth and sixth paragraphs and the section titled “Forward-Looking Statements” of
Exhibit 99.1 only); January
18, 2023; January 23,
2023; January 25, 2023;
February 15, 2023 (first, second and third paragraphs and the section titled “Forward-Looking Statements” of Exhibit
99.1 only); and February 16, 2023; and |
| ● | the description of our securities contained in our Form 8-A filed on December 20, 2021 (File No. 001-38041),
including as amended by Exhibit 1.1 to our Annual Report on Form 20-F filed on April 28, 2022 and any further amendment or report filed
for the purpose of updating such description. |
All subsequent annual reports
filed by us pursuant to the Exchange Act on Form 20-F prior to the termination of the offering shall be deemed to be incorporated by reference
to this prospectus and to be a part hereof from the date of filing of such documents. We may also incorporate part or all of any Form
6-K subsequently submitted by us to the SEC prior to the termination of the offering by identifying in such Forms 6-K that they, or certain
parts of their contents, are being incorporated by reference herein, and any Forms 6-K so identified shall be deemed to be incorporated
by reference in this prospectus and to be a part hereof from the date of submission of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus
to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
We will provide you without
charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits
to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests
to us at: SciSparc Ltd., 20 Raul Wallenberg Street, Tower A, Tel Aviv, 6971916 Israel. Attention: Oz Adler, Chief Executive Officer and
Chief Financial Officer, telephone number: (+972) (3) 610-3100.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
This prospectus is part of
a registration statement on Form F-3 filed by us with the SEC under the Securities Act. As permitted by the rules and regulations of the
SEC, this prospectus does not contain all the information set forth in the registration statement and the exhibits thereto filed with
the SEC. For further information with respect to us and the securities offered hereby, you should refer to the complete registration statement
on Form F-3, which may be obtained from the locations described above. Statements contained in this prospectus or in any prospectus supplement
about the contents of any contract or other document are not necessarily complete. If we have filed any contract or other document as
an exhibit to the registration statement or any other document incorporated by reference in the registration statement, you should read
the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract or other document
is qualified in its entirety by reference to the actual document.
We are subject to the informational
requirements of the Exchange Act applicable to foreign private issuers. As a “foreign private issuer,” we are exempt from
the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and our officers,
directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained
in Section 16 of the Exchange Act. In addition, we are not required to file annual, quarterly and current reports and financial statements
with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we will file
with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form
20-F containing financial statements audited by an independent registered public accounting firm, and may furnish to the SEC, on Form
6-K, unaudited interim financial information.
You can review our SEC filings
and the registration statements by accessing the SEC’s internet site at http://www.sec.gov. We maintain a corporate website at http://www.scisparc.com.
Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus. We have included
our website address in this prospectus solely as an inactive textual reference.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under
the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in the registration
statements of which this prospectus forms a part, a substantial majority of whom reside outside of the United States, may be difficult
to obtain within the United States. Furthermore, because substantially all of our assets and a substantial of our directors and officers
are located outside of the United States, any judgment obtained in the United States against us or any of our directors and officers may
not be collectible within the United States.
We have been informed by our
legal counsel in Israel, Meitar | Law Offices, that it may be difficult to assert U.S. securities law claims in original actions instituted
in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning Israel is not the
most appropriate forum to bring such a claim. In Israeli courts, the content of applicable U.S. law must be proved as a fact which can
be a time-consuming and costly process and certain matters of procedure will also be governed by Israeli law.
Subject to specified time
limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain exceptions, is
non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including
a monetary or compensatory judgment in a non-civil matter, provided that among other things:
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the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment; |
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the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and |
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the judgment is executory in the state in which it was given. |
Even if these conditions are met, an Israeli court will not declare
a foreign civil judgment enforceable if:
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the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases); |
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the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel; |
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the judgment was obtained by fraud; |
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the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court; |
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the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel; |
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the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or |
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at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel. |
If a foreign judgment is enforced
by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred
out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli
court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the judgment,
but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated
in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the annual statutory rate set by Israeli
regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
Up to $1,729,964 of Ordinary Shares
SCISPARC LTD.
ORDINARY SHARES
Prospectus Supplement
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