By Brian Lantier, CFA

NASDAQ:SVRE

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SaverOne (NASDAQ:SVRE) announced on February 18^th, another adjustment of the ADS ratio from 1 ADS to 90 common shares to 1 ADS to 1,200 common shares which is effectively another 1 for 13.33 reverse split.

The combined impact of this ratio adjustment and the October 2024 ratio adjustment (from 1 ADS to 5 ordinary shares to 1 ADS to 90 ordinary shares) is effectively a 1-for-240 reverse split since October 2024. While these adjustments have had the desired effect of boosting the stock’s price above the NASDAQ $1 minimum bid requirement for the moment, it has also diluted existing shareholders to the point where they hold almost no meaningful stake.

As we’ve noted, the company’s reliance on equity issuance to fund operations has led to a staggering jump in the share count in just the past 13 months, growing from 69.6 million shares at 12/31/23 to approximately 675 million at 1/31/25. While the ADS ratio adjustments (from 1 to 5 to 1 to 90 and to now 1 to 1200) and the conversion of some 167k ADSs to close to 200 million ordinary shares has limited the total growth of outstanding ADS, this continuous share issuance is a concern for any investors considering SaverOne. 

The company has announced a number of new pilot agreements and small contract wins which we detail below. It will be critical for the company to demonstrate that it can convert these small pilots into much larger commercial deployments over the next 24 months.

The company has announced a host of new relationships in the past two months including:

1. A pilot project with an Italian luxury and sports car manufacturer to install the company’s distracted driving prevention system in an initial group of employee vehicles. If this pilot goes well, it could be expanded to cover the company’s entire fleet of employee vehicles which is roughly 200 vehicles.
2. A pilot project in Italy with Trans Italia, a logistics and transportation company. The pilot will cover an initial group of trucks owned by Trans Italia which has a total fleet of more than 300 trucks.
3. A new distribution agreement with Smartfits Installations in the UK. Smartfits appears to be a fairly small firm but they do have a commitment to addressing distracted driving as it features prominently on the company’s website.
4. In January the company also announced a new distribution agreement with uniSmart Vertriebs of Germany. In a press release, the company stated that uniSmart provides fleet management and safety systems to various fleets and industries.
5. At the end of January, the company announced an agreement with Oz group to deploy the SaverOne System across the entire Oz fleet of 100 vehicles with an initial phase calling for 30 installations.
6. In mid-February, the company announced its first commercial agreement in the US with MDM Express, Inc. of Charlotte, NC. After a successful pilot program, the company’s US distributor is working with MDM to install the SaverOne system across MDM’s entire fleet (20 trucks).
7. The company announced on December 30^th that it has received its 12th patent out of its total portfolio of 23 patents. This patent granted by the US Patent and Trademark Office is for a technology that determines the relative positions of cellphones in a vehicle. This technology relates to the company’s core solution which enables it to identify where a cellphone is located and block the phones that are in the area of the driver.

VALUATION

Valuation calculations for SaverOne have been very challenging as the company has financed its operations through dilutive financing that exceeded our forecasts and broad adoption of the company’s technology has been slow to materialize. The company’s shares remain in a negative feedback loop where the company’s share price falls, so it has to issue more shares, which results in more dilution lowering the price of the stock, which results in more shares being issued.

We are adjusting our 12-month target valuation for the company to roughly $7 million while adjusting our projected effective ADS count to 820,000 at the end of 2025 resulting in a new target valuation for the shares of $8.50/ADS but we recognize that many of the factors that go into our calculation of this target are difficult to forecast at this time. We hope to have a clearer picture of the company’s prospects both domestically and internationally after the company reports full-year 2024 results in late March.

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