Having entered a strategic agreement, SciSparc Ltd. (Nasdaq: SPRC) shares are up 70.74% to $1.3299 as of the last check. In the last session, SPRC closed at $0.78.
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SPRC has signed which agreement?
ScienceSparc (SPRC) announced today that it had signed an agreement with Merhavit M.R.M Holding and Management Ltd. (M.R.M).
- As part of the agreement, SPRC acquired the rights to acquire Wellution, a top-selling American food supplements and cosmetics brand (the “Brand”) on Amazon.com Marketplace (“Amazon”).
- New assets will be held by SciSparc Nutraceuticals Inc., the company’s newly-established wholly owned subsidiary.
- Aside from hemp-based products, Wellution also sells hemp gummies, hemp oil capsules, hemp gel, hemp cream, detox pills, height pills, antibacterial creams, and anti-aging creams made in the United States.
- As the market leader in industrial hemp on Amazon, Wellution has the potential to expand beyond the American market.
- SPRC believes in the high potential of the Wellution Brand to become a global brand beyond the American market.
- As a way to drive growth and provide shareholder value, SPRC plans to explore additional marketing channels, and examine manufacturing and distribution opportunities.
The agreement also stipulates the following terms
Along with the purchase of the Brand, SciSparc will also enter into a management agreement and have the option of expanding its products to additional territories like Europe, as well as a distribution agreement for a period of 12 months, with a minimum order of $100,000 by the distributor.
In the agreement, the company must fulfill Amazon’s conditions, manufacture, manage inventory and advertising, store and ship the products to Amazon’s warehouse, as well as maintain a predetermined profit level.
Managerial services will be provided by a company on which SciSparc’s CEO and chairman sit as directors. As part of the agreement, the Brand will market and commercialize its products through offline channels in the United States.
In addition to the $4.59 million base cash payment, SciSparc will pay an additional deferred cash payment of 3 times the amount by which the acquired Brand EBITDA exceeds $1.12 million within the next 12 months upon closing, which is subject to certain conditions and expected to be completed within the next 30 days.
What steps will SPRC take to implement the agreement?
A warrant agreement will also be made between M.R.M and SPRC for $25 million worth of shares of SciSparc (SPRC) to be purchased by M.R.M for $7.00 per share with a five-year exercise period after the closing of the transaction. In order for the Warrants to become exercisable, SciSparc must in the aggregate achieve $100 million in sales or close to at least $10.00 in the ordinary share price.
