Breaking Down SciSparc Ltd. (SPRC) Financial Health: Key Insights for Investors

You're looking at SciSparc Ltd. (SPRC) because the biotech sector offers moonshot potential, but honestly, the financials from the first half of 2025 (H1 2025) paint a defintely tough picture, signaling a critical need for cash or a major pipeline breakthrough.

The direct takeaway is that their burn rate has accelerated dramatically; sales for the half-year were a mere $0.461 million, which is a 45% drop from the prior year, but the net loss exploded to $9.33 million. Here's the quick math: that loss is a 171% jump year-over-year, and with a market capitalization hovering around $3.89 million, that kind of cash drain is unsustainable without significant dilution or a massive win.

The cash burn is defintely the main story. Still, you can't ignore the recent news, like the November 2025 patent application for a novel non-hallucinogenic neuroplastogen treatment; that's the kind of pipeline development (R&D) that keeps a small-cap biotech alive, but it doesn't change the fact that the basic loss per share from continuing operations hit $17.92. So, the question isn't just about the science; it's about how many more quarters this balance sheet can float the R&D.

Revenue Analysis

You need to understand exactly where SciSparc Ltd. (SPRC)'s money comes from, because the headline revenue number doesn't tell the whole story. The direct takeaway is that the company's revenue is currently driven entirely by commercial product sales, not its core drug development pipeline, and that sales are contracting sharply in 2025.

For the first half of 2025 (H1 2025), SciSparc Ltd. reported total sales of just USD 0.461 million. This is a significant drop from the USD 0.84 million reported in H1 2024. Here's the quick math: that represents a year-over-year revenue decline of approximately -45.12%. That kind of contraction is a red flag you defintely can't ignore, especially for a small-cap company.

The primary revenue stream isn't the clinical-stage cannabinoid pharmaceuticals (the company's main focus) but rather Online Sales of consumer products. This segment accounted for 100.00% of the company's total revenue in the fiscal year 2024. This means the company is essentially funding its expensive drug discovery efforts with sales of lower-margin hemp-based products.

The revenue breakdown shows a clear picture of the commercial segment's importance:

• Primary Revenue Source: Online sales of hemp-based products.
• Products: Hemp gummies, hemp oil capsules, hemp gel, hemp cream, detox pills, and various anti-aging and antibacterial creams.
• Contribution to Total Revenue: 100.00% (based on FY 2024 data).

The biggest change isn't in the revenue mix, but in the underlying structure of the biotech segment. In October 2025, SciSparc Ltd. announced the sale of its majority-owned subsidiary, Mitocarex, which was focused on drug discovery for resistant cancers. This move, alongside a new focus on quantum-powered 3D protein modeling for AI drug discovery, signals a major strategic pivot away from certain clinical assets. This shift, while forward-looking, comes at a time when the commercial revenue engine is shrinking.

Here is a snapshot of the near-term revenue performance:

What this estimate hides is the potential for a large, one-time licensing or milestone payment, which is common in biotech but not reflected in these recurring sales figures. Still, the current revenue trend is a headwind. For a deeper dive into the company's balance sheet risks, check out the full post: Breaking Down SciSparc Ltd. (SPRC) Financial Health: Key Insights for Investors.

Next Step: You need to monitor the Q3 2025 earnings release for any commentary on the online sales segment's profitability, as this is the only current source of cash flow.

Profitability Metrics

If you are looking at SciSparc Ltd. (SPRC) for near-term profitability, the simple answer is: you won't find it. The company is defintely in a deep-loss, pre-commercial stage, with the primary financial story being the burn rate necessary to fund its central nervous system (CNS) drug pipeline.

The most recent unaudited consolidated interim financial statements for the first half of 2025 (H1 2025), released in November 2025, show a significant widening of the net loss, which is the key metric here. Here's the quick math on the core margins:

• Gross Profit Margin: Not a meaningful metric yet, as the company is primarily R&D-focused, not sales-driven.
• Operating Profit Margin: Deeply negative due to high Research and Development (R&D) expenses.
• Net Profit Margin: A massive -2023.86% in H1 2025.

This kind of margin is common for a clinical-stage biotechnology company, but it highlights the extreme risk and the reliance on future drug success, not current operations.

Profitability Trends and Operational Efficiency

The trend in profitability is moving in the wrong direction, which is a key risk factor for investors. In H1 2025, SciSparc Ltd. reported a net loss of $9.33 million, which is a substantial increase from the $3.44 million net loss reported in the comparable period a year ago. This dramatic shift is due to two factors: a sharp decrease in sales and a likely increase in operating expenses, though the full breakdown is needed.

Here is a snapshot of the recent profitability trend, focusing on the bottom line:

Operational efficiency, in this context, means cost management, especially in R&D. The widening loss suggests that the company is either accelerating its drug development spend or its limited revenue stream is shrinking faster than costs can be cut. The company's core business is in the Biotechnology sector, focusing on cannabinoid pharmaceuticals, which is a capital-intensive area. You can learn more about the shareholder base driving this high-risk strategy at Exploring SciSparc Ltd. (SPRC) Investor Profile: Who's Buying and Why?

Industry Comparison: The Biotech Reality

Comparing SciSparc Ltd.'s margins to the broader Biotechnology industry average reveals the stark difference between a development-stage company and commercial-stage peers. Companies like Azenta, a peer in the sector, reported a GAAP Gross Margin of 45.5% for the full fiscal year 2025, while others like Burning Rock Biotech saw a Q3 2025 Gross Margin of 75.1%.

SciSparc Ltd. has virtually non-existent gross margins because its revenue of $0.461 million is dwarfed by its operational costs. The company is essentially a research engine, not a sales machine yet. The high net loss is the cost of entry for potential blockbuster drug revenue years down the road. Still, the negative margin is the price of admission for this kind of speculative investment.

This is a pure bet on the drug pipeline, not on current operational cash flow. The next action for you is to check the latest SEC filings for a detailed breakdown of the $9.33 million net loss to see exactly how much of that is R&D versus General & Administrative (G&A) expenses; that tells you if the spending is on future growth or just keeping the lights on.

Debt vs. Equity Structure

SciSparc Ltd. (SPRC) operates with an extremely conservative capital structure, choosing to finance its operations almost entirely through equity rather than debt. For a clinical-stage biotechnology company, this is a common, albeit risk-averse, approach.

As of the most recent financial data for the 2025 fiscal year, the company is essentially debt-free, with total debt reported at approximately $0.0. Its total shareholder equity stands at around $8.9 million. This zero-debt position means the company has negligible financial leverage (the use of borrowed money to amplify returns), which is a key factor in its financial health profile.

• Total Shareholder Equity (approx.): $8.9M
• Short-Term Liabilities (approx.): $1.4M
• Long-Term Liabilities (approx.): $9.0K

This is a very clean balance sheet.

Debt-to-Equity Ratio: A Clear Outlier

The Debt-to-Equity (D/E) ratio is the clearest signal of SciSparc Ltd.'s financing balance. At a D/E ratio of approximately 0.01 (based on late 2024 filings, which remains the effective ratio given the zero debt profile), the company relies on equity for 99% of its funding, with debt covering less than 1%.

To put that into perspective, the average D/E ratio for the Biotechnology industry in 2025 is closer to 0.17. SciSparc Ltd.'s ratio is significantly lower than its peers, suggesting a strong preference for non-dilutive funding sources or a difficulty in securing traditional debt financing, which is often the case for pre-revenue biotech firms. This low ratio is a defintely positive sign for solvency risk, but it also means the company is not using financial leverage to potentially boost shareholder returns.

Balancing Equity Funding and Debt Recovery

SciSparc Ltd.'s recent activity confirms its reliance on equity and strategic asset management over new debt. The company's primary focus in 2025 has been on managing its existing capital and recovering assets, not issuing bonds or securing new credit lines.

For example, a November 2025 prospectus filing detailed the termination of a merger agreement with AutoMax Motors Ltd. and a shift to a creditor role for SciSparc Ltd. This means the company is now set to receive cash inflows from AutoMax on two separate loans, totaling $6.25 million, plus accrued interest. This isn't new debt issuance; it's the company moving to collect on a substantial asset.

• $4.25M loan: Due in a single lump-sum payment on January 1, 2028, with 9% annual compound interest.
• $2.0M loan: Repaid in $60,000 monthly installments starting November 20, 2025, with 8% annual compound interest.

The core takeaway is that SciSparc Ltd. is currently funding its R&D pipeline through its existing equity base and strategic financial maneuvers, not by taking on new debt. This structure minimizes interest rate risk and financial distress, but it also means investors should be keenly aware of the potential for future equity dilution to raise the capital needed for late-stage clinical trials. For a deeper dive into who is buying the stock now, you should check out Exploring SciSparc Ltd. (SPRC) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if SciSparc Ltd. (SPRC) has the cash to cover its near-term bills, especially for a clinical-stage biotechnology company that burns cash. The short answer is: their liquidity position is exceptionally strong, but this is primarily due to past financing activities, not operating profit.

As of the most recent financial reporting period (H1 2025), SciSparc Ltd. exhibits a robust liquidity profile. The company's ability to cover its short-term obligations is far from a concern right now. Here's the quick math on their current liquidity position, based on a Current Assets of $7.5 million and Total Current Liabilities of $1.4 million:

• Current Ratio: This ratio of Current Assets to Current Liabilities stands at a significant 5.36:1. A ratio above 2.0 is generally considered healthy, so this is defintely a strong position.
• Quick Ratio (Acid-Test): This is the Current Ratio stripped of inventory ($0.11 million), showing the most liquid assets. The Quick Ratio is approximately 5.28:1. This means SciSparc Ltd. has over five times the cash and near-cash assets to pay off all its immediate debts.

Working capital trends also look solid in the near-term. Working Capital (Current Assets minus Current Liabilities) is a healthy $6.1 million. This substantial buffer gives management significant operational flexibility to fund ongoing research and development (R&D) and clinical trials without immediate pressure to raise capital. Still, you have to look beyond the balance sheet to see the full picture.

Cash Flow Statements Overview: The Burn Rate

The strength in liquidity is a function of the company's financing history, not its day-to-day operations. When you look at the cash flow statement, you see the classic profile of a development-stage biotech firm: consistent cash burn. For the Trailing Twelve Months (TTM) through the end of the last fiscal year, the trends are clear:

• Operating Cash Flow: This is consistently negative, showing a -$5.10 million cash outflow. This is the cash burn from core business activities (R&D, general and administrative costs) and is the primary driver of the need for financing.
• Investing Cash Flow: This was also negative at -$1.63 million, which is typical for a growth company acquiring assets or making strategic investments, such as in intellectual property or new technologies.
• Financing Cash Flow: This is the critical line item. Historically, the company has relied on equity raises (selling shares) to fund its operations and R&D pipeline, which is what created the current cash reserves. This is the source of the high liquidity ratios.

The clear liquidity strength is a short-term advantage, but the long-term risk lies in the negative operating cash flow. The company is using its cash reserves to fund a net loss of $9.33 million for the first half of 2025. This means the $6.1 million in working capital will continue to be depleted until a product reaches commercialization or a significant licensing deal is secured. The key action for investors is to monitor the 'cash runway'-how long the current cash pile lasts given the burn rate. For a deeper dive into who is funding this runway, you should check out Exploring SciSparc Ltd. (SPRC) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at SciSparc Ltd. (SPRC) and asking the core question: is it overvalued or undervalued? The quick answer is that traditional valuation metrics are currently distorted by the company's clinical-stage nature, but the stock is trading at a significant discount to its book value, which suggests a potential undervaluation based on assets, but a high-risk profile based on earnings.

As of November 2025, the stock is trading around the $2.35 to $2.46 range. Over the last 12 months, the price has plummeted by -58.78%, reflecting the high volatility and risk typical of a biotechnology company with a small market capitalization of $3.93 million. The 52-week price range, from a low of $0.197 to a high of $8.90, tells you everything you need to know about its extreme volatility.

Key Valuation Ratios: What They Tell Us

When a company is not yet consistently profitable, the standard Price-to-Earnings (P/E) and Enterprise Value-to-EBITDA (EV/EBITDA) ratios become less useful, but they still signal the current financial reality. SciSparc Ltd. is a perfect example of this complexity.

• Price-to-Earnings (P/E) Ratio: The P/E ratio stands at -0.06 as of November 2025. A negative P/E ratio simply means the company has negative earnings (a loss), so the ratio is not a meaningful valuation tool here.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is reported at -6.1x for the end of 2024. Like the P/E, the negative value indicates negative earnings before interest, taxes, depreciation, and amortization (EBITDA), which is expected for a company focused on research and development.
• Price-to-Book (P/B) Ratio: This is where things get interesting. Based on the Dec 2024 book value per share of $15.80 and the current stock price of approximately $2.46, the P/B ratio is around 0.16. A P/B ratio significantly below 1.0 suggests the market is valuing the company's equity at less than its net tangible assets (book value), which is a classic sign of potential undervaluation, though it often comes with the caveat of poor profitability or high execution risk.

Here's the quick math: the market is currently assigning only 16 cents of market value for every dollar of book value. That's a defintely a deep discount.

Analyst Consensus and Dividend Outlook

SciSparc Ltd. does not appear to pay any dividends at this time, so the dividend yield and payout ratios are not applicable for income-focused investors.

The analyst consensus is mixed but leans cautious. Technical analysis models have recently upgraded the stock from a 'Strong Sell' to a 'Sell Candidate'. This signals a strong bearish trend in the near term. However, some price forecasts for 2025 project an average target of $3.8966, representing a potential +65.81% rise from the current price, which is based on an expectation of future growth and successful clinical milestones. The key risk here is that the high P/B multiple (5.4x in one report) despite the low stock price suggests investors are still pricing in significant future asset value, but the negative cash flow is a constant headwind.

For a deeper dive into the company's strategic moves and pipeline, you should review the full analysis on Breaking Down SciSparc Ltd. (SPRC) Financial Health: Key Insights for Investors.

Next Step: You should model a discounted cash flow (DCF) valuation using a high discount rate (e.g., 15%+) to account for the execution risk and compare the result to the current 0.16 P/B ratio to determine your own margin of safety.

Risk Factors

You need to look past the occasional stock surge and focus on the fundamental risks at SciSparc Ltd. (SPRC). The direct takeaway is that while the company is strategically active, its financial health is precarious, marked by significant cash burn and a reliance on its early-stage drug pipeline.

For the first half of 2025, SciSparc reported a significant operational challenge: a net loss of USD 9.33 million, a sharp increase from the USD 3.44 million loss in the prior year's period. This is the clearest sign of financial strain. The company's sales also dropped, coming in at only USD 0.461 million for the half-year ended June 30, 2025, compared to USD 0.84 million a year earlier. Honestly, a biotech company with a clinical-stage pipeline is expected to lose money, but the rate of loss is what matters.

Financial and Operational Headwinds

The core financial risk is liquidity and the high cost of drug development. The company is quickly burning through cash despite holding an estimated $6.88 million in cash as of a recent period, which is a finite runway. The latest reported retained earnings for the quarter ending June 30, 2025, were $0, underscoring the lack of accumulated profit.

• Nasdaq Compliance: SciSparc had to execute a 1-for-21 reverse share split effective July 3, 2025, to maintain its listing on the Nasdaq Capital Market. This is a defintely necessary action to meet the minimum bid price requirement, but it often signals underlying stock performance issues to the market.
• Pipeline Dependence: The company's value rests on the success of its drug candidates, like SCI-110 for Tourette syndrome. Failure in any phase of a clinical trial-which is common in the pharmaceutical world-could instantly wipe out years of investment and intellectual property value.
• Geopolitical Exposure: SciSparc's operations are subject to political and economic instability, including the ongoing risk of unrest and actual or potential armed conflict in Israel and other parts of the Middle East. This is an external factor that is impossible to mitigate fully.

Strategic and Regulatory Risks

The company's strategy involves complex corporate restructuring, which introduces execution risk. For example, the plan to spin off pharmaceutical assets through a reverse merger with Miza III Ventures Inc., valuing those assets at approximately $11.6 million, was expected to close by April 30, 2025. Any delay or collapse of such a transaction creates uncertainty and can erode investor confidence.

Also, as a clinical-stage pharmaceutical company, the regulatory environment is a constant threat. The U.S. Food and Drug Administration (FDA) and other global regulators hold the keys to commercialization. Any unexpected change in the regulatory pathway designated for a product candidate, or a negative outcome in a Phase IIb clinical trial, would be crippling.

Here's the quick math on the half-year loss: the $9.33 million net loss against a small revenue base means the company is spending roughly 20 times its sales revenue just to keep the lights on and fund R&D. That's the reality of early-stage biotech.

If you want to dive deeper into who is betting on these risks paying off, you should check out: Exploring SciSparc Ltd. (SPRC) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear path forward with SciSparc Ltd. (SPRC), and the reality is the company is undergoing a massive, two-pronged strategic pivot in 2025. The core takeaway is that SciSparc is shifting from a pure-play clinical-stage pharma model to a diversified holding company with assets in both biotech and the electric vehicle (EV) sector.

This diversification is the primary growth driver, but it also introduces complexity. The company's reported sales for the half year ended June 30, 2025, were $0.461 million, with a net loss of $9.33 million, which is typical for a clinical-stage firm. The new ventures are what could defintely change that trajectory.

Key Growth Drivers: Pharma Pipeline and Strategic Acquisitions

SciSparc's future growth hinges on two pillars: advancing its central nervous system (CNS) drug pipeline and monetizing its new, non-pharma assets. On the pharma side, the pipeline is moving forward, which is the necessary, albeit slow, path to blockbuster revenue.

• SCI-110: Phase IIb clinical trial for Tourette Syndrome (TS) is proceeding in the U.S., following FDA Investigational New Drug (IND) clearance.
• SCI-210: A randomized, double-blind, and placebo-controlled trial for children with autism started in the first quarter of 2024.

The biggest near-term change is the strategic move into a completely different market. In September 2025, shareholders approved a merger with AutoMax Motors, a key player in Israel's parallel vehicle import sector, effectively moving SciSparc into the electric vehicle market. Plus, the October 2025 agreement to acquire a controlling interest (between 75% and 84%) in Miza III Ventures Inc. (to be renamed NeuroThera Labs Inc.) consolidates their clinical-stage pharma portfolio into a majority-owned subsidiary. This move is about creating a clearer structure and potentially unlocking value in the drug assets.

Future Revenue and Earnings Estimates

To be fair, there is currently no sufficient analyst coverage to provide a consensus future revenue growth projection or a formal earnings estimate for SciSparc. Here's the quick math on why: the company is in a deep transition, and clinical-stage pharmaceutical revenue is unpredictable until a drug is approved. What this estimate hides is the potential for new revenue streams from the AutoMax merger, which could provide a material, non-phpharma sales base in the near term.

For context, the company's trailing 12-month revenue was cited at $1.31 million as of September 2025, with a cash balance of $1.54 million. The loss per share from continuing operations for the half year ended June 30, 2025, was a loss of $17.92. The table below shows the core financial picture before the full impact of the new ventures is reflected.

Competitive Advantages and Strategic Partnerships

SciSparc is building a competitive edge through technology and partnership, rather than just market share. The most significant move is the resolution in September 2025 to launch a quantum computing initiative for 3D protein modeling. This is a high-risk, high-reward bet on next-generation artificial intelligence (AI) drug discovery, aiming for greater accuracy in predicting protein structures. That's a serious technological moat if they pull it off.

Also, the collaboration with Clearmind Medicine Inc., now under the majority-owned NeuroThera Labs Inc., has already resulted in the filing of 13 patents to date. This joint intellectual property (IP) portfolio covers combination therapies for various CNS disorders, including a new Israeli patent application filed in November 2025 targeting depression. This IP focus is a tangible competitive advantage in the biotech space. If you want to dive deeper into who is betting on this strategy, you should read Exploring SciSparc Ltd. (SPRC) Investor Profile: Who's Buying and Why?.

Next Step: Finance: Track the consolidated revenue reporting from the AutoMax merger and NeuroThera Labs Inc. in the Q4 2025 filings to assess the initial impact of the diversification strategy.