SciSparc Ltd. (NASDAQ:SPRC) (“Company” or “SciSparc”), a specialty clinical-stage pharmaceutical company focusing on the development of therapies to treat disorders and rare diseases of the central nervous system, announced today that its Board of Directors (the “Board”) has unanimously adopted a limited duration shareholder rights plan (the “Rights Plan”), effective immediately.
“Today we announced exciting positive results from our weight loss and metabolic disorder program with our proprietary psychedelic-based treatment,” said Oz Adler, SciSparc’s Chief Executive Officer. “Unfortunately, SciSparc, like many other clinical-stage pharmaceutical companies, continues to experience a significant and ongoing dislocation in the trading price of its ordinary shares. The adoption of the Rights Plan is intended to protect the long-term interests of SciSparc and all of our shareholders and enable them to realize the full potential value of their investment in the Company. The Rights Plan is designed to reduce the likelihood that any entity, person or group would gain control of, or significant influence over SciSparc, through the open-market accumulation of the Company’s shares without appropriately compensating all SciSparc shareholders for control,” concluded Mr. Adler.
The Board did not adopt the Rights Plan in response to a specific takeover threat. The Rights Plan is not intended to prevent or interfere with any action with respect to SciSparc that the Board determines to be in the best interests of the Company and its shareholders. Instead, it will position the Board to fulfill its fiduciary duties on behalf of all shareholders by ensuring that the Board has sufficient time to make informed judgments about any attempts to control or significantly influence SciSparc. The Rights Plan will encourage anyone seeking to gain a significant interest in SciSparc to negotiate directly with the Board prior to attempting to control or significantly influence the Company.
The Rights Plan is similar to those adopted by other publicly traded companies, and does not contain any dead-hand, slow-hand, no-hand or similar feature that limits the ability of a future Board to redeem the rights. Pursuant to the Rights Plan, SciSparc will issue one special purchase right for each ordinary share outstanding as of the close of business on December 8, 2023. While the Rights Plan is effective immediately, the rights generally would become exercisable only if an entity, person or group acquires beneficial ownership of 10% or more of SciSparc’s outstanding ordinary shares in a transaction not approved by the Company’s Board.
In that situation, each holder of a right (other than the acquiring entity, person or group) will have the right to purchase one ordinary share at a purchase price of $0.001 per share. In addition, at any time after an entity, person or group acquires 10% or more of the Company’s ordinary shares, the Company’s Board of Directors may exchange one ordinary share of the Company for each outstanding right (other than rights owned by such entity, person or group, which would have become void).
The Rights Plan has a 364-day term, expiring on November 27, 2024.
Meitar Law Offices is serving as legal counsel to SciSparc.
