By Brian Lantier, CFA

NASDAQ:SVRE

READ THE FULL SVRE RESEARCH REPORT

SaverOne (NASDAQ:SVRE) reported its full-year 2024 results after the market closed on March 21^st and we have used the published full-year results and the previously announced 6-month results through 6/30/24 to back into the second half results for 2024. We estimate that revenues for the second half of 2024 were approximately $326k up nicely from the $129k in the first half of 2024, but revenues still missed our projection by about 30%. We do believe that the company’s gross margin improved meaningfully in the second half of 2024 (exceeding 40%) but it is unclear what drove that improvement and given the relatively low sales volume it is difficult to read too much into the margin changes.

The company indicated that it experienced longer sales cycles in its domestic market (Israel) for the balance of 2024 and that impacted second-half results as well. While the company has expanded its pilot programs in the US and Europe, we remain very concerned with the slow pace of orders. In August of 2024, the company reported that roughly 4,800 units had been ordered but as of March 2025, the number of ordered units has only grown by 600 units to 5,400 units. Given the company’s significant R&D expenditures and cash burn rate, the company will need to convert a significant number of its pilot agreements into commercial sales soon.

The company’s cash used in operations exceeded more than $9 million and with just $3.6 million on the balance sheet as of 12/31/24 the company noted that it does not believe that it has sufficient resources to operate for 12 months from the date of the 20-F (March 21, 2025). Management indicated that it plans to address its cash flow deficiency by raising funds from new or existing investors.

As we have noted previously, gauging the share count and ADS count for SaverOne is incredibly difficult. As of 1/31/25, the company reported 675 million shares outstanding and by March 19, 2025, this had grown to 741 million.

The company’s reliance on equity issuance to fund operations has led to a staggering jump in the share count in just the past 15 months, growing from 69.6 million shares at 12/31/23 to approximately 741 million as of March 2025. 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 has effectively diluted the existing holders to a point where they hold almost no meaningful position in the stock.

VALUATION

We are adjusting our 12-month target valuation for the company to roughly $6 million while adjusting our projected effective ADS count to roughly 900,000 at the end of 2025 resulting in a new target valuation for the shares of $6.50/ADS but we recognize that many of the factors that go into our calculation (particularly the share count) of this target are difficult to forecast at this time.

If the company is able to secure a less dilutive form of financing, signs a significant commercial agreement that speeds the company’s path to profitability or if it successfully attracts financing for its VRU unit we will reevaluate our target.

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