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SciSparc Ltd. SPRC signed a definitive agreement with Merhavit M.R.M Holding and Management Ltd (“M.R.M”), to acquire its rights to purchase, Wellution, an Amazon.com AMZN Marketplace account, American food supplements and cosmetics brand and trademark. The company has established a new wholly owned subsidiary, SciSparc Nutraceuticals Inc., to hold the new assets.
Wellution sells dozens of hemp-based products, including hemp gummies, hemp oil capsules, hemp gel, hemp cream, detox pills, height pills, antibacterial creams, and anti-aging creams, among other beauty and hair treatment products that are all manufactured in the United States. In total, the brand has over 40,000 product reviews, most of which are 4 and 5-star reviews.
“We are excited about the execution of our decision to identify strategic transactions in lucrative growing markets. Wellution is a leader in the fast-growing global industrial hemp market on Amazon and we believe in the high potential of expanding the brand’s reach beyond the American market,” stated Oz Adler, SciSparc’s CEO. “It is our intention to explore additional marketing channels, examine manufacturing and distribution opportunities in order to drive growth and provide value to our shareholders.”
In addition to purchasing the brand, SciSparc will enter a management agreement and received the option to expand the brand to additional territories such as Europe, as well as a 12-month distribution agreement with a minimum initial order by the distributor of $100,000 of the brand’s products.
The management agreement includes the fulfillment of Amazon’s conditions, manufacturing, inventory and advertising management, storage and shipment to the Amazon warehouse and maintaining a pre-determined profit level for the products. The management services would be provided by a company for which SciSparc’s CEO and SciSparc’s chairman of the board serve as directors. The distribution agreement would provide for the marketing and commercialization of the brand’s products, through offline channels in the United States.
Upon closing, which is subject to certain conditions and expected to be completed within the next 30 days, SciSparc will pay a base cash payment of $4.59 million and in 12 months pay an additional deferred cash payment of a multiple 3 times the amount by which the acquired brand EBITDA exceeds $1.12 million.
In addition, the company will grant to M.R.M $15 million worth of warrants to purchase ordinary shares of SciSparc at an exercise price of $7.00 per share and with an exercise period of five years from the closing of the transaction. The warrants will become exercisable upon the achievement of a milestone of $100 million of sales of the brand in the aggregate or if the price of SciSparc’s ordinary shares closes at $10.00 or above.
Photo by Elsa Olofsson on Unsplash
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Image and article originally from www.benzinga.com. Read the original article here.