SaverOne to hold TASE IPO despite 'going concern' warning

SaverOne plans to raise NIS 18-26 million in its Tel Aviv Stock Exchange (TASE) IPO at a company valuation of NIS 100 million, after money, according to an updated prospectus filed by the company.

SaverOne has developed a system that it says represents a unique solution to the problem of distraction when driving from use of mobile telephones. The system takes over the driver's telephone and prevents use of dangerous applications. Among the company's investors are Ituran Location and Control Ltd. (Nasdaq:ITRN); TASE:ITRN), UMI Israel, and Keshet Broadcasting.

SaverOne plans to offer between 1.1 million and 1.6 million shares at a minimum price of NIS 15.90 per share. After the IPO, the public will hold 14.7% of the company's share equity and 12.9% on a fully diluted basis. The offering will be led by Rosario and Discount.

According to the prospectus, the flotation depends on the company's equity after being listed for trading not being less than NIS 8 million. As of the end of 2019, the company's equity deficit was NIS 19.8 million compared with NIS 13 million at the end of 2018.

The company's auditors Fahn Kane, Grant Thornton Israel have attached a 'going concern' warning to the company's reports and said, "The company is in the R&D stages and has not yet produced major revenue from its activities. The ability of the company to meet its development targets and realize its business plans depends on the continued raising of sources of financing, which is not assured."

In each of the past three years prior to December 31, 2019, the company reported losses and negative cash flow from its day-to-day operations."

According to SaverOne, 25% of road accidents in the US are connected to the use of mobile telephones. It says that its system is the only one that prevents access to distracting applications in the vicinity of the driver. When the vehicle stops, applications become unblocked.

SaverOne was founded in 2014. It currently employs 24 people and has ten registered patents. It has so far raised $10 million. It states in its presentation that it has collaboration agreements with Israel Police, Dan Bus Company, and insurance company Harel Insurance Investments and Financial Services Ltd. (TASE: HARL).

SaverOne's CEO is Ori Gilboa, formerly CEO of the auto division of Meir Group, and its chairman is Jacob Tenenboem, who founded Internet company Genieo Innovation, which was sold to Somoto for $34 million.

SaverOne says in its presentation that its business model is based on one-time sales of the system, and it estimates that when regulations requiring the use of a system to prevent mobile telephone distraction during driving come into force, the market will be worth $70 billion. The company describes this regulation as a game changer. It says that the market is highly competitive, but that as far as it knows there are no similar full, effective solutions.