Israeli pharmaceutical company SciSparc Ltd. (SPRC) announced on Thursday that it has entered into a non-binding letter of intent (LOI) to divest its entire ownership stake in MitoCareX Bio Ltd. to a publicly-traded U.S. company. SciSparc currently holds 52.73% of MitoCareX Bio's issued and outstanding share capital.
MitoCareX Bio, founded in collaboration with Dr. Alon Silberman, is dedicated to drug discovery and the development of cancer therapeutics by targeting the mitochondrial SLC25 protein family.
Under the terms outlined in the LOI, SciSparc will initially sell 27% of its ownership in MitoCareX to the buyer in exchange for $700,000 in cash. In the subsequent phase, SciSparc will transfer its remaining 73% stake in MitoCareX. This transfer will be made in return for a specified number of shares, based on the buyer's valuation of $8.0 million and MitoCareX's valuation of $5.0 million, inclusive of the initial $700,000 cash consideration.
The LOI also includes milestone provisions, which, if achieved, could elevate the total consideration from $5 million to $7 million. The full terms of this transaction are pending the negotiation and execution of definitive agreements.
According to the LOI, the valuation of MitoCareX has increased by 47% since SciSparc's initial $3.4 million investment in the company.
