Jeffs’ Brands completes acquisition of 49% interest in SciSparc Nutraceuticals

Jeffs’ Brands completed the purchase of approximately 49% of the outstanding capital stock of SciSparc Nutraceuticals, a wholly-owned subsidiary of SciSparc that owns Wellution, a top-selling Amazon.com Marketplace food supplements and cosmetics brand, for $2.5 million in cash, pursuant to a stock purchase agreement entered into between the Company, Jeffs’ Brands Holdings Inc, a wholly-owned Delaware subsidiary of Jeffs’ Brands and SciSparc on February 23, 2023. Additional deferred cash payments of approximately $489,330 for price adjustments related to inventory and working capital, will be paid in five equal monthly installments, beginning in May 2023 pursuant to an addendum to the Wellution Agreement entered into between the Company, the Subsidiary and SciSparc on March 22, 2023. As collateral for the payment in full of the Price Adjustment, SciSparc will hold back such number of shares of common stock of SciSparc Nutraceuticals, equal to the outstanding due amount of the Price Adjustment. The stock interest of Jeffs’ Brands in SciSparc Nutraceuticals will be held by the Subsidiary. Also pursuant to the Wellution Agreement, in connection with the Closing, the Company will issue 247,415 of its ordinary shares to SciSparc and SciSparc will issue 360,297 of its ordinary shares to the Company in a mutual share exchange at an aggregate value of $288,238, which was adjusted from $300,000, pursuant to the 4.99% ownership limit included in the Wellution Agreement. The number of the Exchange Shares acquired by each company was calculated based on the average closing price of the relevant company’s shares on the Nasdaq Capital Market for the 30 consecutive trading days ending on the third trading day immediately prior to the Closing. In addition, at the Closing, the Company and SciSparc Nutraceuticals entered into a consulting agreement by which the Company will provide management services for the Brand for a monthly fee of $20,000; in addition the Company received a signing bonus of $51,000. The consulting agreement is for an undefined period of time, and may be terminated by either party with 30-days’ advance notice. The Brand is profitable with millions of dollars in gross annual sales on the Amazon marketplace.